Essential health benefits
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Essential Health Benefits Under the Affordable Care Act
Introduction to Essential Health Benefits
The Affordable Care Act (ACA) mandates that private insurance plans in the individual and small-group markets cover a set of "essential health benefits" (EHB). These benefits are intended to ensure that all Americans have access to a minimum standard of health coverage, regardless of their circumstances1. However, the implementation and definition of these benefits have been subject to significant debate and variation across states.
State-by-State Approach to Defining Essential Health Benefits
Initially, the Department of Health and Human Services (HHS) was expected to establish a uniform federal standard for EHB. Surprisingly, HHS allowed each state to define its own essential benefits, leading to a diverse range of coverage standards1 3. This state-by-state approach has resulted in significant variability in the benefits provided, with some states exploiting the flexibility to maintain the status quo in their insurance markets3.
Recommendations from the Institute of Medicine
The Institute of Medicine (IOM) recommended that EHB should be equivalent in scope to an average small-business plan and should evolve to become more evidence-based, specific, and value-promoting over time2. This recommendation aims to balance the need for comprehensive coverage with the practicalities of affordability and sustainability.
Balancing Adequacy and Affordability
The ACA's EHB provisions require plans to cover broadly defined service categories, limit consumer cost-sharing, and meet certain actuarial value requirements. Despite the flexibility given to states, few have fundamentally restructured their health insurance markets. Future revisions should focus on transparency, stakeholder involvement, and balancing the adequacy and affordability of coverage3.
Objectives and Challenges of Essential Health Packages
The concept of a core package of essential health services has been explored in various health reform proposals. Key objectives include protecting against catastrophic illness, ensuring social risk pooling, improving allocative efficiency, and enhancing equity of access to services. However, these objectives often conflict, necessitating a clear understanding of the reform's purpose before developing essential benefit packages4.
Impact on Low- and Middle-Income Countries
In low- and middle-income countries (LMICs), designing health benefits packages is crucial for achieving universal health coverage. Distributional cost-effectiveness analysis (DCEA) can help evaluate interventions based on their impact on population health and health inequality. This approach has shown potential in informing health benefits package design and improving equity in LMICs5.
Addressing Disparities and Ensuring Adequate Coverage
The ACA aims to reduce disparities in health insurance coverage by creating a marketplace where all individuals can access quality, affordable health insurance. However, the definition of "essential benefits" remains vague, potentially leading to disparities in the adequacy of coverage. It is crucial to ensure that the EHB package optimally satisfies the basic needs of the covered population6.
Implications for People with Disabilities
The ACA's EHB statute prohibits discrimination based on age, disability, or expected length of life. This provision is particularly important for individuals with disabilities, who often face discrimination by insurers. Ensuring that people with disabilities receive the full benefits to which they are entitled requires careful implementation and oversight7.
Pediatric Essential Health Benefits
The ACA includes pediatric services as a required class of coverage. However, the lack of a clear definition for these services has led to a patchwork of coverage across states, with many plans excluding services for children with special health care needs. Future regulations should address these gaps to ensure comprehensive pediatric coverage9.
International Comparisons and Financial Sustainability
An international comparison of eight European countries revealed that the scope of essential health benefits is generally comprehensive, with significant variation in cost-sharing arrangements. Reducing the scope of benefits and increasing user charges may contribute to financial sustainability, but variations in the volume and price of care have a larger impact. Policymakers should adopt an integrated approach to address the sustainability of healthcare10.
Conclusion
The implementation of essential health benefits under the ACA has been complex and varied across states. While the flexibility given to states has allowed for tailored approaches, it has also led to inconsistencies in coverage. Future efforts should focus on ensuring that EHB packages are comprehensive, evidence-based, and equitable, with particular attention to vulnerable populations such as individuals with disabilities and children with special health care needs. An integrated approach that considers both the scope of benefits and financial sustainability is essential for the long-term success of health reform initiatives.
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Most relevant research papers on this topic
Essential health benefits and the Affordable Care Act: law and process.
The state-by-state approach to defining essential health benefits in the Affordable Care Act is a lawful exercise of HHS's authority, but HHS may have evaded procedural obligations by announcing the policy through an Internet bulletin.
Defining essential health benefits--the view from the IOM Committee.
The IOM Committee recommended that essential health benefits under the Affordable Care Act be equivalent to an average small-business plan and should become more evidence-based, specific, and value-promoting over time.
Balancing adequacy and affordability?: Essential Health Benefits under the Affordable Care Act.
The 2016 revisions to Essential Health Benefits under the Affordable Care Act should be transparent, involve diverse stakeholders, and focus on balancing adequacy and affordability, addressing previous shortcomings.
Possible objectives and resulting entitlements of essential health care packages.
Essential health care packages can achieve various objectives, but clear understanding of reform's purpose is essential for effective development and implementation.
Distributional impact of the Malawian Essential Health Package
The Malawian Essential Health Package can be targeted to specific interventions to improve the health of the poorest fastest, but identifying these interventions is uncertain.
Observational StudyNecessary Health Care and Basic Needs: Health Insurance Plans and Essential Benefits
The "essential health benefits package" in the Affordable Care Act should optimally satisfy the basic needs of the people covered, rather than being vague and open to multiple interpretations.
Realizing health reform's potential: the essential health benefits provisions of the Affordable Care Act: implications for people with disabilities.
The Affordable Care Act's essential health benefits provisions will help Americans with disabilities avoid discrimination in health insurance, but must be implemented effectively.
Implementing the Affordable Care Act: Revisiting the ACA's Essential Health Benefits Requirements.
States have varied approaches to essential health benefits under the Affordable Care Act, and federal regulators should use insurance company data to assess whether these strategies are producing coverage improvements.
The ACA's pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with exclusions.
The ACA's pediatric essential health benefit has resulted in a state-by-state patchwork of coverage with exclusions, highlighting the need for future regulations on pediatric services.
Literature ReviewThe Relationship between the Scope of Essential Health Benefits and Statutory Financing: An International Comparison Across Eight European Countries
Reducing the scope of health benefits and increasing user charges may contribute to healthcare financial sustainability, but variations in healthcare volume and price have a greater impact.
Observational Study