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Defining the Essential Health Benefits

ACA requires HHS to develop a set of “essential health benefits” (EHB). Plans in Exchange (in addition to certain plans outside the Exchange) must offer these benefits to consumers as a bare minimum. HHS recently asked the Institute of Medicine (IOM) to assist with developing criteria to determine these benefits. Services offered in these plans must be medically necessary and not drive up the cost of health care to the point where it is unaffordable for the 68 million people accessing plans in 2014.

The following is a list of 10 categories of health services that are required. These are services currently provided by a typical employer:

  1.  Ambulatory patient services;
  2. Emergency services;
  3. Hospitalization;
  4. Maternity and newborn care;
  5. Mental health and substance use disorder services;
  6. Prescription drugs;
  7. Rehabilitative and habilitative services and devices;
  8. Laboratory services;
  9. Preventive and wellness services and chronic disease management; and
  10. Pediatric services (including oral and vision care)

The IOM did not come up with a list of specific services to cover. Rather, they developed recommendations for HHS to follow while determining essential services. They recommended that on the whole, the EHB:

  • Be affordable;
  • Maximize the number of people with coverage;
  • Protect the most vulnerable;
  • Encourage better practices;
  • Focus on high value services;
  • Address most important medical concerns; and
  • Protect against financial risks due to illness

They also developed criteria to guide EHBs on individual services, devices or drugs. They must:

  • Be safe;
  • Be medically effective;
  • Demonstrate meaningful improvement in outcomes;
  • Be a medical service; and
  • Be cost effective

The IOM also recommended that the EHB be updated annually, starting in 2016, by a National Benefits Advisory Council. The process will be open to stakeholder comments. They encourage the public to participate in the process of prioritizing services to help them learn of enrollee priorities when tradeoffs are necessary.

Click here to read IOM’s “Essential Health Benefits: Balancing Coverage and Cost.”