Most Health Plans Are Not Meeting PPACA’s EHB Requirements

MARCH 22, 2013 – 10:46 AM

EHB Approval Process Complicated by Potential State FlexibilityImage

new survey reveals that less than 2% of health insurance plans provide all the essential health benefits (EHB) required by the Patient Protection and Affordable Care Act (PPACA).

PPACA requires all health insurance plans to cover a standard set of EHBs.  Beginning in 2014, Section 1302 of PPACA requires health insurance plans offered to individuals and small businesses to provide EHBs in each of ten categories.  Beyond a baseline set of benefit requirements, the U.S. Department of Health and Human Services (HHS) has left the ability to define what services must be included as EHBs to the states, allowing for more flexibility.

Survey Findings

The survey, performed by HealthPockets, Inc., examined the coverage provided by over 11,000 health insurance plans.  The data analyzed was obtained from insurance records made public by the Departmenf of Health and Human Services.

On a more positive note, plans offered an average of 76% of the EHBs. One hundred percent of the health plans reviewed in the survey are providing the mandatory preventative and wellness care, management of chronic disease coverage, hospitalization and emergency medical care coverage.   Virtually all, or 99 percent, provide ambulatory medical services such as physician and physician extender office visits and lab services.

However, the study results demonstrate that significant coverage gaps exist when using EHBs as the benchmark.  For example:

  • The benefit elements most frequently absent include pediatric dental and vision care.  
  • Only 8% of plans provided coverage for  dental check-ups.  
  • Two thirds of health insurance plans included in the survey pool do not offer prenatal, delivery, and postnatal healthcare benefits in their base coverage.   
  • Only half of the plans offer outpatient and inpatient health benefits for alcohol or drug addiction.  
  • Mental health coverage is only slightly better, with six out of ten plans covering outpatient and inpatient treatment.   

The survey also measured how health plans vary from state to state. Health plans offered in Massachusetts cover 94% of EHBs on average, followed closely by Rhode Island’s plans, which provide about 93%. Hawaii plans cover 90% of mandatory benefits and plans in California, Maryland and Vermont cover 89%.

Alaska plans have the lowest level of coverage at only 66% of EHBs. Wisconsin plans are at 67%, and both Texas and New Hampshire have the next lowest carrier coverage levels at 68%.

EHB History

The flexibility that PPACA affords to states in establishing their EHB package was applauded by state regulators, who previously were concerned that a single national EHB would cause significant market disruptions in many smaller and more rural states. Consumer and patient advocates as well as providers have criticized the decision, arguing that a national standard would reduce variation between states.  These critics also are concerned that some plans currently have inadequate benefits.  Many insurance carriers expressed initial support for the flexibility, but now face the prospect of creating EHB benefit plans that comply with their respective state designated EHBs. Further, they must navigate the proposed rates and forms through the appropriate state insurance regulatory approval processes in time for the sales season prior to the October – December 2013 open enrollments for the January 1, 2014, effective dates. 

EHBs and Exchanges

The creation of state health benefit Exchanges in each of the 50 states has added an unforeseen layer of complexity to the implementation of EHB packages. While some states have chosen to establish their own Exchanges, a few states have decided to engage in a joint venture Exchange with the federal government.   Approximately half of the states have refused to establish a state Exchange and have defaulted to the federal government to establish a federally-facilitated Exchange. 

Insurance carriers that want to sell compliant EHB plans through their respective Exchanges must have their plans approved by the state insurance regulators and then submit their proposed products to the Exchange to become a certified Qualified Health Plan (QHP).   Many states are lagging behind in the implementation of their Exchanges.  As carriers wait for their plans to be approved, the sales season running up to the October 1, 2013, deadline for Exchanges to be operational is quickly approaching.  It is becoming increasingly improbable that many Exchanges truly will be operational in time for October – December 2013  enrollments.

It remains to be seen whether the opening date for the Exchanges will have to be delayed. However, there is a great deal of work to be done in an exceedingly short amount of time. A rushed implementation with many misfires, and the concurrent bad press, will not help the President in moving his health reform policies forward. 

To find answers to other frequently asked questions about health care reform, or to submit a question, we invite you to visit the reform Q&A page at

Author: Michael Gomes

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