boutin essential benefits

The National Health Council’s Essential Health Benefits

Marc BoutinExecutive Vice President & COO

National Health Council

© National Health Council

The mission of the National Health Council is to provide a united voice for people with chronic diseases and disabilities.


ACA: Minimum Essential Benefits The ACA creates 10 categories of essential benefits that plans must cover

beginning in 2014:

» Ambulatory patient services» Emergency services» Hospitalization» Mental health and substance

abuse services» Rehabilitative and habilitative

services and devices

» Prescription drugs» Laboratory services» Preventive and wellness services

and chronic disease management» Maternity and newborn care» Pediatric services

The essential benefits requirements also places limits on patient costs» Limits out-of-pocket costs to Health Savings Account (HSA) levels (in

2011, $5,950 for individuals)» Limits deductibles for small group plans to $2,000 for individuals and

$4,000 for families


Essential Health Benefits – Value StatementsGoal: Ensure that people with chronic conditions have access to affordable and high-quality services and treatments necessary for prevention, diagnosis and management of their health condition

Domain Value

Process Transparency

• Create processes for meaningful patient input at all stages of defining essential health benefits

• Put safeguards in place to protect patients from discriminatory practices • Develop periodic evaluation processes to review the adequacy of the essential

health benefits package• Define the interaction of federal essential health benefits with existing state

mandates

Criteria to Define “Essential” Benefits

• Ensure that access to essential health benefits by individual patients is not impeded by financial barriers

• Promote flexibility to accommodate technological advances and evolving evidence• Include benefits from a variety of care settings and providers to meet all patient

needs

Recourse in Decision-making

• Permit the public to request reconsiderations of the essential health benefits package by the Secretary of HHS

• Allow enrollees to challenge a health plan’s interpretation of essential health benefits and rationale for the inclusion or exclusion of individual services


Potential Approaches to Developing the Essential Health Benefits Package

1 2 3

Define benefits narrowly

Medicare Part B program

Define categories of benefits broadly and establish process-oriented requirements as a ‘check’ on plans

Medicare Part D program

Define categories of benefits broadly, granting plans the flexibility to develop coverage policies within each category

FEHBP plan


Essential Health Benefits Landscape

IOM DOL HHS+ State Exchanges

Health Plans

Informing Regulations Developing Regulations Implementing Regulations

Continue to endorse NHC’s values on EHB

Ensure that any limitations to DOL’s database are addressed


Timeline for Engagements: Essential Health Benefits

March 2011 May July September November January 2012

Proposed Rule Anticipated from HHS

IOM Committee Meeting

IOM Recommendations Expected

DOL data expected in “Spring”

Third and fourth IOM Committee meetings

Develop essential health benefits package using FEHB plan as foundation in consultation with NHC members

Develop ideal approach for HHS/State regulatory oversight

Vet regulatory approaches with NHC members

Share regulatory approach with HHS

Commission actuarial analysis of the affordability of NHC’s essential health benefits package and discuss implications among membership

Craft regulatory language that HHS could adopt and review with NHC membership

Craft regulatory language


Development of Policy Recommendations

EHB White Paper

• This report established baseline knowledge and considered the approaches HHS may take in defining the EHB package

EHB Cost Analysis

• This analysis examined the cost of a comprehensive health benefits package, using the Federal Employees Health Benefits Package as a model

EHB Policy Recommendations

• This report will articulate NHC’s recommendations and proposed solutions and will be shared with key policymakers and stakeholders

Commissioned Actuarial Analysis

Create a baseline benefit package Use FEHBP BCBS Standard Option as a foundation (minus dental/vision

benefits)

Price the baseline benefit package

Calculate actuarial value (AV) Platinum (90% of covered charges are paid by the plan)

Gold (80% of covered charges are paid by the plan)

Silver (70% of covered charges are paid by the plan)

Bronze (60% of covered charges are paid by the plan)



Plan Premium Costs

PlanEstimated

Annual Premium—Individual*

OOP Maximums Total Cost

BCBS Model $5,032

Platinum $5,205 $1,500 $6,705

Gold $4,627 $5,950 $10,577

Silver $4,048 $5,950 $9,998

Bronze $3,470 $5,950 $9,420

*The estimated premiums and the reduced OOP max for the platinum plan are actuarial estimates from ARC.

Room in Household Budget for Health Care?

Reported Income (%

poverty level)Necessities Necessities +

Premium

Necessities + Premium + Median

OOP Cost

Necessities + Premium + 90th Percentile OOP

Cost

<Poverty 17.30% 17.30% 17.30% 17.30%101–150 7.50% 8.40% 8.50% 10.80%151–200 3.70% 7.60% 9.00% 17.50%201–250 3.00% 5.70% 8.80% 26.20%251–300 1.10% 5.30% 6.90% 24.20%301–350 0.70% 4.20% 5.30% 17.50%351–400 1.20% 3.50% 3.90% 12.50%401–450 0.50% 2.70% 3.70% 15.30%451–500 0.40% 3.60% 4.70% 12.00%

>500 0.20% 0.60% 0.60% 2.50%

(c) Jonathan Gruber and Ian Perry, The Commonwealth Fund

At 250% FPL: Family of Four, One Person with Kidney Disease

Annual Income (Gross) $55,875Median Necessities*(at 71%) – $39,671

$16,204

Maximum Premiums** – $4,500

$11,704

OOP Maximum*** – $5,950

$5,754

Per Month ÷ 12

~ $480

Subtract the cost of taxes, child care, food, housing, transportation, and miscellaneous expenses of 10%

Subtract ACA-defined maximum premium for family at 250% FPL

(compared to ~$8,000 for a silver plan with no subsidy)

Subtract reduced out-of-pocket maximum due to 250% FPL

(compared to $11,900 with no subsidy)

Divide by 12 for estimate of remaining funds in monthly budget

Actuarial analysis performed for NHC byActuarial Research Corporation and Avalere Health

At 450% FPL: Individual with Rheumatoid Arthritis

Annual Income (Gross) $49,005Median Necessities*(at 63%) – $30,873

$18,132

Platinum Premiums** – $5,205

$12,927

OOP Maximum*** – $5,950

$6,977

Per Month ÷ 12

~ $580

Subtract cost of taxes, child care, food, housing, transportation,

and miscellaneous expenses

Subtract cost of premiumfor a platinum plan

Subtract out-of-pocket maximum set by the ACA

Divide by 12 for estimateof remaining funds in monthly

budget

Actuarial analysis performed for NHC byActuarial Research Corporation and Avalere Health


Regulatory Opportunities


Non-Discriminatory Utilization Management

Recommendation HHS Regulatory Opportunity

EHB regulation should provide for oversight of plan benefit design to avoid discrimination caused by unfair utilization management techniques

Outline oversight mechanisms for states to use in reviewing plan utilization management policies

States should establish oversight mechanisms to review plan processes

HHS should continue to monitor state oversight programs to guarantee that plans are meeting federal requirements

MODEL PROGRAM: The Medicare Part D Formulary Review process analyzes the use of practices such as prior authorization, step therapy, and quantity limits and compares practices to industry standards, guidelines, and other Part D plans.


Continuity of Care Protections


EHB regulation should include patient protections to ensure plan cooperation and coordination when people switch enrollment between plans

Include protections for patients switching enrollment (among qualified health plans and to and from Medicaid) so patients do not have to re-establish the necessity of treatment protocols already in place

Require plans to provide written notice of the right to transfer treatment protocols

Require Navigator education programs to provide information about the potential implications of switching between plans

MODEL PROGRAM: Medicare Part D Auto and Facilitated Enrollment processes ensure beneficiaries with limited income remain enrolled in Part D plans that have reduced costs.


Cost-Sharing Protections


EHB regulation should require plans to have non-discriminatory cost-sharing policies across benefit categories.

Exchanges should allow creative benefit design to encourage plans to develop novel approaches to cost- sharing

Require plans to disclose the deductible, co-payment, and co-insurance amounts applicable to covered services prior to enrollment

Prohibit specialty tiers

Offer protection from high out-of-pocket costs on prescription drugs and allow tiering exceptions

Create oversight mechanisms to ensure that states are reviewing plan benefit design to ensure cost-sharing is neither unfair nor discriminatory

MODEL PROGRAM: The Maryland Comprehensive Standard Health Benefit Plan* specifies cost-sharing requirements for certain services and includes some service limits to offer an extra level of patient protection for enrollees in these plans.


State Navigator Programs


EHB regulation should contain specific mechanisms to assist patients in identifying an appropriate plan and navigating enrollment and other key plan processes

Include resources to educate enrollees about their plan rights and responsibilities

Prohibit educational materials and programs from steering or attempting to steer people into a plan or type of plan

Navigator programs should coordinate with other consumer assistance programs in the state

MODEL PROGRAM: The State Health Insurance Assistance Programs (SHIPs) are an often cited example of what a Navigator program could resemble. SHIPs provide assistance to Medicare beneficiaries and help them with their Medicare benefits.


Care Coordination & Management Activities


EHB regulation should require proven effective care coordination and management activities to improve outcomes and reduce total healthcare costs

Require care coordination activities as an essential health benefit

Create pathways for plans to develop innovative strategies to compensate providers for effective care coordination

Encourage state IT programs to include information about the care coordination policies of plans on state Exchange websites

MODEL PROGRAM: Medicare Advantage coordinated care plans are required to have quality improvement and chronic care improvement programs as well as monitor and evaluate these activities and outcomes.


Medical Necessity Decision Making & Appeals ProcessesRecommendation HHS Regulatory Opportunity

EHB regulation should outline clear, understandable standards for plan medical necessity determinations and should include a process for appealing adverse plan determinations

Require plans to use medical necessity criteria that are objective, clinically valid, and compatible with generally accepted principles of care

Plan denials based on lack of medical necessity should explain, in clear language, the criteria used to make the determination

Create uniform exceptions and appeals process for items and services that do not meet definition of medical necessity

Navigator programs should be available to guide patients through the complexities of plan appeal processes

MODEL PROGRAM: Medicare Part D offers an example of a federally regulated, nationwide program that has set requirements of participating plans for exceptions and appeals processes.


State Exchange Requirements


HHS Exchange regulation should include federal and state oversight to ensure that plans offered on state exchanges meet all appropriate and necessary criteria (including network adequacy standards)

Require Exchanges to monitor and seek to improve quality of care

Plans may not exclude eligible individuals from coverage

Plans utilizing a provider network shall be required to demonstrate an adequate number of in-network providers in various specialties corresponding to the EHB categories of services

MODEL PROGRAM: The Massachusetts Health Connector’s Commonwealth Choice program offers a variety of plans with different benefit packages. The Health Connector reviews and approves each plan offered in Commonwealth Choice. Of the two operational health insurance exchanges (MA and UT), the program in Massachusetts provides more oversight and patient protections than the exchange in Utah.


Alignment of IOM & NHC on Essential Health Benefits

NHC Value IOM Report Alignment

Bar Discrimination in Utilization Management Minimal alignment

Ensure Continuity of Care Not Addressed

Require Cost-Sharing Protections Not Addressed

Provide Education and Coordination through Navigators Not Addressed

Cover Care Coordination and Management Activities Not Addressed

Include “Medical Necessity” Decision Making and Appeals Processes Moderate alignment

Ensure Access to Essential Health Benefits through Exchanges Minimal alignment


Limitations of IOM’s Recommendations:Inclusion Criteria

IOM Recommendation Limitation

Of the four inclusion criteria for EHB, items and services must have demonstrated evidence that the item or service is:

Likely to enhance patient outcomes when compared to available alternatives

Cost-effective to justify the health gain

The data and research both on patient outcomes and cost-effectiveness are limited and conflicting

Much existing research is based on the population at-large and not on subpopulations

There is no consensus on application of these research methods to coverage criteria


Limitations of IOM’s Recommendations:Balancing Affordability and Coverage

IOM Recommendation Limitation

On the issue of balancing affordability with effective coverage, the IOM falls squarely on the side of affordability

With the balance shifting towards cost, more people, including those with complex chronic conditions, may have access to coverage

However, the coverage available may not be comprehensive or effective, in light of specific health care needs


National Health Council Resources

EHB Policy Recommendations (2011): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_UnitedPatientVoice.pdf

EHB Actuarial Analysis (2011): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_ActuarialAnalysis.pdf

EHB White Paper (2010): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_WhitePaper.pdf

Marc BoutinExecutive Vice President & COO

National Health [email protected]

boutin essential benefits

Health & Medicine

health care

categories of benefits

minimum essential benefits

plan national health

state exchanges health

dentalvision benefits

platinum plan

plan gold