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Intro
Essential Health Benefits are a set of defined minimum health benefits that new insurance packages must include under the Patient Protection and Affordable Care Act (ACA).

History/Background
The Patient Protection and Affordable Care Act (ACA), signed into law March 23, 2010, was the first national legislation in the United States to standardize various aspects of the health insurance market. While the law primarily focuses on health insurance reforms, it includes other elements such as provisions aimed at improving health data and informatics, quality of care, and prevention and public health. In all, the law includes a number of market reforms, rules and regulations that represent the most comprehensive legislative effort to reform the health care system in the United States.

Among the insurance reforms are provisions to increase consumer protections and improve distributional equity among consumers. Plans are not allowed to place lifetime or annual limits on covered health services. While some services will be free, others will still be subject to cost sharing, including deductibles, copayments, and coinsurance. States can also choose to expand Medicaid. The ACA creates new eligibility for Medicaid which has the potential to increase health insurance among individuals with low income. Starting January 1, 2014, plans offered in the individual and small group markets are required to offer a basic package of services, known as Essential Health Benefits (EHB).

Prior to the ACA, insurance regulations to improve consumer protections were largely undertaken by states. By and large, there were major variations and gaps in the services received by clients, even within the same insurance companies. As an example, maternity services and coverage for behavioral health services, including mental health, were often missing from plans. Individual and small group plans in particular were notable for these sorts of omissions. An important failure in the health insurance market was not only the variability in the product provided but also the lack of information provided to consumers about prices. The ACA’s response to these issues is two-fold:


 * 1) Creation of a state-run insurance marketplace (for individual and small group plans) where plans are standardized by actuarial value into four tiers (bronze, silver, gold, platinum).
 * 2) Requiring Essential Health Benefits (EHB) for all plans sold in the marketplace. This would be one of a few requirements that insurance companies must meet in order to be eligible to participate in the marketplace.

EHBs require basic benchmarks that signal to consumers purchasing plans from the marketplace that they will receive some minimum standard of coverage. To date, all states have adopted benchmark standards but there are a number of questions that remain about implementation challenges, issues of coordination, costs, and limits on insurers to innovate.

Essential Health Benefits
By law, the ACA requires all non-grandfathered individual and small group health plans to cover EHBs. Each state is required to choose a benchmark plan based on existing plans and those that have the highest enrollment in each state. This benchmark plan serves as the set of standard benefits that each plan in the state must offer. States have the option of choosing their benchmark from the following types of plans: the three largest small-group health insurance programs, the three largest state employee health plan options, the three largest federal employee health plan options, or the largest commercial HMO plan sold in the state. If the state does not designate a benchmark plan, the small-group health plan with the highest enrollment would be automatically selected as the default benchmark.

At the administrative level, the United States Department of Health and Human Services (HHS) is responsible for translating the law into the rules, regulations, and guidance for states. In order to better define EHBs for states, HHS commissioned the Institute of Medicine (IOM) to evaluate existing guidelines and provide more specific guidance. The IOM utilized the following seven criteria to evaluate research and practice to advise HHS on the appropriate EHBs to include:
 * 1) Affordability for employers, consumers, and tax payers
 * 2) Maximizing the number of people with insurance coverage
 * 3) Protecting the most vulnerable populations by addressing their needs
 * 4) Encouraging better care practices
 * 5) Resourcefulness, focusing on high value services (outcomes relative to costs) and reducing use of low value services
 * 6) Addressing medical needs of the greatest concern
 * 7) Protecting against financial risks due to catastrophic events or illnesses

The following ten benefits were ultimately chosen as the Essential Health Benefits package:
 * 1) Outpatient care: Care received without being admitted to a hospital. Outpatient care centers include a doctor’s office, outpatient clinic, or outpatient surgery center. Outpatient care can also include home health services and hospice care, though some plans limit the amount of days that will be covered.
 * 2) Emergency room services: Care received for conditions that could lead to serious disability or death if not immediately treated. Transport by ambulance is included.
 * 3) Inpatient care: Care received while admitted to a hospital. This includes care provided from any hospital staff member, laboratory tests, procedures and surgeries, medications, as well as all hospital fees such as room and facility costs. Certain plans may also recognize stay in a skilled nursing facility as inpatient care, though definitions for this qualification may vary.
 * 4) Maternity and newborn care: Care that women receive during pregnancy, labor, delivery, and post-delivery.
 * 5) Mental health and substance use disorder services: Care including evaluation, diagnosis, and treatment of mental health condition or substance abuse disorder, including behavioral health treatment, counseling, and psychotherapy. Services provided may be both outpatient and inpatient, though certain plans may have different coverage day limits, depending on state and federal parity laws for mental health and substance use disorder.
 * 6) Prescription drugs: All plans must cover at least one drug in every category and class in the US Pharmacopeia, the official publication of approved medications in the US. Drug costs will also be counted toward out-of-pocket caps on medical expenses. Over the counter drugs are generally not covered, even if prescribed by a doctor.
 * 7) Rehabilitative services and devices: Therapies to relieve pain after injury or illness, including rehabilitation therapies for speech and mobility. Plans must also cover equipment related to these therapies, such as canes, knee braces, walkers, and wheelchairs.
 * 8) Laboratory services: Plans must cover any laboratory tests that are used to help a doctor diagnose an injury, illness, condition, or to monitor the effectiveness of a particular treatment. However, certain diagnostic tests that doctors order when you have symptoms of disease can still be charged, such as lab tests or MRI. Meanwhile, some preventive screenings, such as breast cancer screenings and prostate exams, are provided free of charge.
 * 9) <B>Preventive services:</B> This includes preventive services such as counseling, physical exams, immunizations, and screenings. Most preventive care visits are free if accessed through an in-network provider, and include:
 * 10) For all adults:
 * 11) * Diabetes screening
 * 12) * Colorectal cancer screening
 * 13) * High blood pressure screening
 * 14) * Tobacco cessation counseling
 * 15) * Screening for depression
 * 16) * Dietary counseling
 * 17) * HIV screening for those at risk of the disease
 * 18) * Screening for obesity and weight loss counseling
 * 19) For women:
 * 20) * Mammograms every year
 * 21) * Cervical cancer screenings
 * 22) * Osteoporosis screening
 * 23) For men:
 * 24) * Cholesterol screening (35 years and older)
 * 25) <B>Pediatric services:</B> Care provided to infants and children, including well-child visits and vaccines and immunizations. Pediatric services must also include dental and vision care for children younger than 19, to include two routine dental exams, an eye exam, and corrective lenses each year.

State Variations
As of May 2014, 25 states defaulted to the largest small-group plan; 20 states and the District of Columbia chose one of the small-group plans; two states chose a state employee plan; and three chose the largest HMO. None of the states chose a federal employee plan.

The EHB requirements do not specify what cost-sharing levels should be set for each service. Cost-sharing features are based on the actuarial values of the plan, which for the state exchanges are set based on the level of the metal tier. Additionally, the ACA makes it clear that if states choose a benchmark plan that covers services beyond those defined as EHBs, states must afford the costs of those benefits. The exception to this is if a state chooses a small-group plan or a state employee plan that includes state-mandated benefits. Then, those benefits would be considered EHB and covered at no cost to the state. It is believed states did not chose federal plans because they would be liable to cover extra costs and/or include benefits not already available in their individual or small-group market. Because the ACA prohibits lifetime and annual dollar limits on EHB, some states skirted the issue by imposing non-monetary limits on service such as quantitative limits on number of service days or visits per year. For states that chose plans that did not cover all of the EHB, supplemental coverage is required to round out their EHB benchmark product. Nearly every state needed to supplement its benchmark plan for pediatric dental and vision services.

States were given the flexibility to substitute an “actuarially equivalent” service within a given category. Most benchmark plans did not have coverage for three required categories: habilitative services, and pediatric oral and vision care. The approach to allowing each state to choose its own benchmark plan has drawn criticism from health care provides, consumer groups, and patient advocates. Critics say a national standard for benefits should be established. Yet, the business community and states contend the flexibility to tailor benefits is a better arrangement. In 2016, the government is expected to reassess whether or not to establish a national benchmark EHB plan, but currently the plan offerings do have a considerable amount of variance.

The following chart from the Robert Wood Johnson Foundation shows state-to-state variance:

Exemptions from the EHB Requirement
Health insurance companies are not required to include the 10 EHBs in plans that are:
 * 1) Grandfathered from before the ACA was enacted,
 * 2) Scheduled to be discontinued in 2015,
 * 3) Self-funded through an administrative services organization (ASO), and
 * 4) Large group plans. The requirement also does not apply to health insurance provided by the Indian Health Service.

Grandfathered plans are either employer-based plans or individual plans. These plans tend to have limited benefits and often cost less. Employers offering grandfathered plans can continue to enroll individuals if the insured are notified that they have a grandfathered plan, the benefits are not changed significantly, the costs are not increased substantially, and if at least one person has been continuously covered since the ACA enactment. Individual grandfathered plans however, cannot be offered to new enrollees after March 23, 2010, but insurers can continue to offer the plan to existing beneficiaries. Insurers can also decide to stop insuring people with an individual grandfathered plan if they provide 90 days notice to the beneficiary before the stop date. Large employers that “self-insure”, or pay directly for employees’ health care costs, as well as large group plans, are not required to offer the 10 EHBs. The rationale behind this exemption is that large employers and large group plans tend to include generous benefits and these plans already offer the 10 EHBs or their equivalent.

The EHB requirement does not apply to the Indian Health Service (IHS), which provides health care services to American Indians and Alaska Natives. American Indians and Alaska Natives are eligible to be receive health services through IHS and enroll in a health plan offered in the health insurance marketplace. They can guarantee their access to the 10 EHBs if they sign-up for a health insurance plan through their state’s exchange or the national exchange.