March 17, 2017

States Plan for Essential Benefits After PPACA

The Patient Protection and Affordable Care Act (PPACA) requires coverage for essential health benefits (EHB), defined as health treatment and services benefits in sections for all beneficiaries, women and children. These benefit requirements were applied to all policies sold in state Health Insurance Exchanges and small group and individual markets.

As described in the February 20, 2013 EHB Bulletin, published by the Centers for Medicare and Medicaid Services, and in §156.100 of the applicable HHS regulation, each state had the option of selecting a benchmark plan to serve as the standard for health insurance. Default benchmark plans for states that do not exercise the option to select a benchmark health plan were set to the largest plan by enrollment in the largest product in the state’s small group market. As described in §156.110, an EHB-benchmark plan must offer coverage in each of the 10 statutory benefit categories.

To mitigate the negative impact of repeal of PPACA, state legislators are seeking to enact mandates or required health coverage for specific treatments, benefits, providers and categories of dependents.

A debate continues whether such mandates actually ensure adequate patient protection or if they further increase their health care costs. Before PPACA’s passage, every state had laws that required private market health insurance to cover specific benefits and provider services. Some states are reverting to such mandates that were in in place before the federal law went into effect.

California, Iowa, Massachusetts, New Jersey, New Mexico, New York, Virginia and Washington are among states with legislation pending on essential health benefits.