Before the Affordable Care Act, services such as maternity care, mental health care, and vision and oral health care for kids were often missing from state individual markets or only offered as expensive insurance riders.
That all changed with the ACA, which required that all individual market insurers cover “essential health benefits,” a defined set of basic health services that consumers have access to under their health coverage.
Chris Hoeh, center, receives physical therapy at Boston’s Spaulding Hospital in April 2017 following an injury. Rehabilitative services are one of the essential health benefits mandated by the ACA. Also shown are physical therapy student Samuel Johnson, left, and physical therapist Melissa Agrimanakis.
Photo by Jonathan Wiggs, courtesy The Boston Globe/Getty Images
Since the requirement kicked in, research has documented positive change. For example, studies show that post-ACA, use of mammography has increased among all economic population groups, including the poorest patients. More patients are getting vaccinated against human papillomavirus, and out-of-pocket costs for prescription drugs have decreased nearly 30 percent.
While the essential health benefits have been welcomed by consumers and public health advocates, they are now under threat. A handful of federal policy proposals on the table could undermine the benefits rule and make comprehensive coverage less accessible and affordable — and take a major step backward for public health.
The proposals would expand the duration of short-term health plans that do not comply with ACA rules from less than three months to less than 12 months, allow states more leeway in defining essential health benefits and designating benchmark plans, and expand the use of ACA-exempt association health plans.
“Without the essential health benefit requirement, it would essentially be a race to the bottom in what individual market plans would cover,” Matthew Fiedler, PhD, who served as chief economist on President Barack Obama’s Council of Economic Advisers, where he oversaw work on health care policy, told The Nation’s Health. “You want to make sure these (insurance) products offer real protections when people get sick.”
Prior to ACA implementation, each state decided which health services, providers and people insurers were required to cover on the individual market.
In pre-ACA Texas, for example, laws did not require that insurers cover maternity care on the individual market. Therefore, no company did so.
“In Texas, the individual market pre-ACA was pretty dysfunctional if you were looking for good coverage,” Stacey Pogue, MPAFF, senior policy analyst at the Austin-based Center for Public Policy Priorities, told The Nation’s Health. “There was a whole range of ways insurers could limit coverage.”
And Texas was hardly an outlier: the Kaiser Family Foundation reports that in 2010 — the year the ACA became law — 33 states had no mandate to cover maternity care for individual and small-group insurers. That was in stark contrast to the group or employer-based market, where maternity care is a staple of coverage.
The ACA defines 10 categories of essential health benefits:
ambulatory patient services,
emergency services,
hospitalization,
maternity and newborn care,
mental health and substance use disorder services,
prescription drugs,
rehabilitative and habilitative services and devices,
lab services,
preventive and wellness services and chronic disease management, and
pediatric services, including oral and vision care.
The ACA benefit rule also covers the newly expanded Medicaid population, puts limits on out-of-pocket costs associated with the covered services and bans annual and lifetime limits on essential health benefits.
While the ACA broadly defines the categories, states fill in the details. Under the ACA, each state picks a “benchmark plan” — such as a state employee health plan or the largest HMO offered in the commercial market — to define the particular benefits covered in each of the categories.
Fiedler, who is now a fellow with the Brookings Institute Center for Health Policy, said the essential health benefits rule was designed to give consumers confidence that the plans they purchased “actually provided real coverage.
“Health care really is complicated, and consumers can have trouble assessing whether a plan covers what they need today and what they might need down the road,” he said. “There’s a lot of value in ensuring all plans cover a core set of services.”
Of the plans on the table that would water down the essential health benefits rule, Fiedler said the highest-impact proposal is the one that would expand the duration of short-term health plans that do not comply with ACA rules. Doing so would pull more young and healthy people out of the ACA-compliant market, making plans that do offer comprehensive coverage more expensive, he said.
A February report from the Urban Institute came to the same conclusion, finding that the combined effect of expanding short-term plan duration and eliminating the requirement that people have to have coverage or pay a fine in 2019 will likely increase premiums on ACA-compliant plans an average of 18 percent in 43 states.
States could push back against the federal measures. For instance, if the short-term plan proposal is finalized, states still have the authority to regulate their sale and limit their impact on the comprehensive care market.
Pharmacist Jose Marco, left, tells Francisca Rios how to take her medication in March 2006 in Los Angeles. Prescription drug coverage is one of the essential health benefits mandated by the ACA. Since the law was enacted, out-of-pocket costs for prescription drugs have decreased nearly 30 percent.
Photo by Bryan Chan, courtesy Los Angeles Times/Getty Images
“How states respond (to these proposals) will have a very big impact going forward,” Fiedler said.
Access to necessary, basic care expanded
For many patients, the ACA’s essential health benefits rule has been transformative. For example, the rule expanded mental health and addiction parity to millions more Americans.
“It’s been a dramatic shift,” Andrew Sperling, JD, MA, director of legislative advocacy at the National Alliance on Mental Illness, told The Nation’s Health.
Pre-ACA, federal parity measures already on the books required insurers that did cover mental health to do so on par with other health services, but did not require insurers offer such coverage to begin with. In 2010, only 23 states required any kind of mental health coverage on their individual markets.
Post-ACA, research shows a significant drop in the percentage of adults with moderate mental illness who have no usual source of care and in the number of adults with severe mental illness forgoing medication and care. Sperling noted that despite moves at the federal level, the essential health benefits rule is “still baked into the law” and states cannot scrap it altogether. But echoing Fiedler, he said state officials will be key in protecting affordable access to plans that cover mental health and addiction.
“Parity is attached to the ACA,” Sperling said.
Advocates for maternal and child health also worry that proposed federal rules are prioritizing affordability to the detriment of actual health outcomes.
“These proposals are focused exclusively on reducing costs and the easiest way to reduce costs is to cover less,” Cynthia Pellegrini, senior vice president for public policy and government affairs at the March of Dimes, told The Nation’s Health. “Lousy coverage is cheap, but it doesn’t keep you healthy…Instead, we ought to be looking at the drivers of those costs and how we can impact those, rather than simply taking an ax to the benefits package.”
Pre-ACA implementation, according to the Kaiser Family Foundation, 3 in 4 health plans offered in the nongroup market did not cover childbirth and inpatient maternity care. Post-ACA, the mandated maternity coverage has been “life-altering” for many women and their families, Pellegrini said, noting that she often hears from women who say access to coverage has meant they and their families now hold the decision-making power on the right time to have children.
“One of the greatest obstacles has been that maternity care is seen as a benefit that’s nice to have, but not necessary to have,” Pellegrini said. “It somehow got put into the optional bucket and we think that’s wrong. It’s critical that every woman covered by every plan be able to receive appropriate care before, during and between pregnancies.”
In a 2017 Congressional Budget Office analysis of the American Health Care Act, which House Republicans put forward to repeal and replace the ACA, researchers said maternity and mental health coverage would likely be among the first benefits eliminated from the individual market if they were no longer required.
“We don’t want to return to the days when different plans were offered to men and women and in which women were expected to bear the total cost of childbearing,” Pellegrini said. “That’s profoundly wrong.”
Another benefit the CBO predicted would likely disappear without the essential health benefit rule is pediatric dental care. The ACA requires all individual marketplaces offer the coverage either integrated into a qualified health plan or as a separate, stand-alone plan. According to Colin Reusch, MPA, director of policy at the Children’s Dental Health Project, the latest data show the percentage of children without dental coverage dropping from 16 percent in 2010 to about 10 percent, with 141,000 kids gaining dental coverage via federally facilitated marketplaces in 2017.
“From our perspective, it was a major step forward,” he said. “It was recognition via statute that all children deserve and need oral health care in order to be fully healthy.”
Like fellow advocates, Reusch worries that current federal proposals could undermine essential health benefit protections.
“Our fear is that because dental coverage has long been seen as a supplemental benefit rather than a core component of coverage, it will once again be relegated to the realm of secondary coverage,” he said.
For more information on the essential health benefits, visit www.familiesusa.org.
- Copyright The Nation’s Health, American Public Health Association
