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January Exchange Board Meeting #2: Assessing Potential EHB Benchmark Plans in California

The Exchange Board held a meeting in Sacramento yesterday focused on recent proposals around the determination of Essential Health Benefits (EHBs). On December 16, 2011, DHHS released a bulletin on EHBs regarding the regulatory approach they plan to use to define EHBs under Section 1302 of the Affordable Care Act.

Deborah Kelch, consultant to the Exchange, provided an overview of the federal provisions regarding EHBs in ACA. In 2014, all qualified health plans in the Exchange and non-grandfathered plans outside of the Exchange are required to offer a minimum floor of benefits in the small group and individual markets. These benefits also apply to those newly eligible for the Medi-Cal expansion and those enrolled in a Basic Health Plan (if the state chooses to establish one). ACA laid out 10 benefit “categories,” including ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. If a state chooses to offer services beyond what is required, they will have to pay the additional cost. Federal guidance also mentioned that benefits should be similar to those offered by a typical small employer.

The bulletin proposed that EHBs be defined on a state-by-state basis using a benchmark approach. In 2014 and 2015, states may select a benchmark plan whose services would become the EHBs for the state. States have the option to select either one of the three largest state employee health plans, one of the three largest federal employee health plans, one of the three largest small group plans, or the largest HMO plan offered by the state’s commercial market. Plans will be chosen based on enrollment data in the first quarter of 2012 and benchmark benefits will be chosen in the third quarter of 2012. The state will need to determine covered services (covered benefits, drugs and devices, and quantitative limits or exclusions), cost-sharing (deductibles, co-payments, co-insurance, covered services with no cost-sharing, out of pocket maximums), and coverage terms (in-network/out of network, prior authorization, provider type of license).

The Exchange Board contracted with a firm, Milliman, to analyze and compare the health services covered by the 10 benchmark plans in California. Robert Cosway, a consultant with Milliman, provided an overview of potential benchmark plans in California.  The plans were determined to be the following:

  • Three largest Federal Employees Health Benefits Program (FEHBP)
    • Government Employees Health Association (GEHA)
    • Blue Cross Blue Shield Basic (BCBS Basic)
    • Blue Cross Blue Shield Standard (BCBS Standard)
  • Three largest California State Employee Plans (CalPERS)
    • Blue Shield Basic HMO
    • Anthem Blue Cross PERS Choice PPO (Choice)
    • Kaiser HMO
  • Three largest California Commercial Small Group Products (unconfirmed)
    • Small Group Anthem Blue Cross (Solution 2500) PPO
    • Small Group Kaiser HMO
    • Small Group Blue Shield (Spectrum PPO Plan 1500 Value)
  • Largest California Commercial Group HMO
    • Large Group Kaiser Traditional HMO

Milliman determined that all potential benchmark plans are comprehensive. They cover standard facility and professional services, and prescription drugs. All benchmark plans covered anesthesia for dental procedures, medically necessary abortions, TMJ surgery, reconstructive surgery, inpatient detoxification treatment, oral contraceptives, cancer screenings and, when available, the HIV/AIDS vaccine. Some services were offered in some plans but not others and could have a potential cost impact, including assisted reproductive technology (i.e. in-vetro fertilization), hearing aids and surgically implanted hearing devices, acupuncture and chiropractic services. Other services had variability in limits across potential benchmark plans, such as limited numbers of visits per years, including physical therapy, occupational therapy, speech therapy, acupuncture, chiropractic services, and skilled nursing facility.

Milliman discovered that pediatric dental and vision services and habilitative services were not typically covered in potential benchmark plans. Milliman recommended setting the pediatric dental and vision benchmark to the Federal Employees Dental and Vision insurance program for CHIP.

The California Health Benefit Exchange, in partnership with the Department of Health Care Services, Department of Insurance, Department of Managed Health Care, and Managed Risk Medical Insurance Board, plans to submit comments on the proposed bulletin in the next few weeks.

The Exchange Board’s next steps are the following:

  • Develop comments on the bulletin from California and other stakeholders
  • Get continued clarification from DHHS on specific guidances
  • Verify benchmarks in compliance with federal choices
  • Ensure benchmark includes the 10 specified categories under ACA
  • Compare benefits and coverage terms amongst potential benchmarks
  • Understand and evaluate the implications of choosing each benchmark

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