Friday, March 8, 2013

Fwd: qotd: Only 2% of individual plans meet "essential health benefit" requirements

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-------- Original Message --------
Subject: qotd: Only 2% of individual plans meet "essential health
benefit" requirements
Date: Fri, 8 Mar 2013 10:15:08 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

March 7, 2013
Almost No Existing Health Plans Meet New ACA Essential Health Benefit
By Kev Coleman

Given that health insurance plans will have to meet new minimum coverage
standards starting in 2014, HealthPocket examined the current
marketplace of individual health plans to measure the market disruption
that will occur as these plans are replaced by plans compliant with the
new standards.

Our research took the Affordable Care Act's Essential Health Benefits as
our starting point. The Essential Health Benefits are the minimum
categories of health insurance coverage that every qualified health plan
must have starting January 1, 2014. HealthPocket then examined 11,100
individual health plans across the United States to see how many plans
had coverage in each of the Essential Health Benefit categories.

The data shows that there will be a near complete transformation of the
individual and family health insurance market starting in 2014. Less
than 2% of the existing health plans in the individual market today
provide all the Essential Health Benefits required under the Affordable
Care Act (ACA).

On average, the health plans provided 76% of the ACA's Essential Health
Benefits. Benefits such as hospitalization, emergency care, and
ambulatory services (such as visits to a primary care doctor or
specialist) were covered by almost all plans in one form or another. A
more detailed analysis of our results revealed that the missing 24% of
Essential Health Benefits were concentrated around a few categories.

Dental and vision care for children was the least likely of the
Essential Health Benefits to be provided in base benefits for a health
insurance plan. Only one out of four plans nationally had these benefits
within their base coverage. Looking at these benefits at a more granular
level revealed that only 8% of plans provided coverage for dental
check-up services. Maternity coverage was nearly as infrequent as
pediatric dental and vision coverage. Two thirds of health plans did not
offer their beneficiaries prenatal, delivery, and postnatal healthcare
coverage. Substance Use Disorder Coverage was frequently absent in
health insurance coverage as well. Only half of plans covered inpatient
and outpatient services for substance use issues (e.g. alcohol or drug
addiction). Mental health coverage was slightly better with six out of
ten plans covering inpatient and outpatient treatment.

Implications for Health Insurance Premiums?

One of the questions raised by the results of this study is whether the
coverage expansion required by the ACA will cause premiums to rise in
2014. Although the answer to that question is beyond the scope of this
study, premiums could rise due to a combination of factors, including:

* The closing of the coverage gap as described in this study

* Guarantee issue provisions that will allow people with pre-existing
medical conditions to enroll in health plans

* ACA actuarial value requirements on the maximum out-of-pocket costs
that can be charged to beneficiaries

Comment: One of the problems that needed to be addressed by the
Affordable Care Act (ACA) was the fact that health plans in the
individual market have very skimpy benefits - benefit packages that were
designed by private insurers who were attempting to keep their premiums
competitive. This study confirms the extent of the inadequacies of these

In response, ACA included a mechanism to require a minimum basic level
of essential health benefits (EHB). The expansion of the benefits to be
covered, along with guaranteed issue to those with preexisting
disorders, and placing a maximum on out-of-pocket costs, will all result
in significantly higher premiums for plans offered in the individual
market. That is in spite of the fact that many will still find the
benefits to be deficient, and will still face large out-of-pocket costs
because of the low actuarial values of the plans that most people will

Even with subsidies, these plans will be expensive. And for those who do
not qualify for subsidies? Maybe those potential purchasers would
finally see the wisdom of establishing an equitable public system of
financing health care through progressive taxes - a single payer
national health program. They certainly aren't going to like what they
are going to get under ACA.

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