One of the great challenges facing the folks who have been tasked to implement the Big O’s health care law is defining “essential benefits,” the core medical services that insurers must cover.
Despite its voluminous nature, the law is remarkably vague in this regard. It does identify 10 care categories that health plans must provide to consumers who federally-funded health insurance exchanges to select a plan, but the categories and associated lists aren’t comprehensive or specific (the categories appear at the end of this post).
The Institute of Medicine has been tasked to flesh out the lists of required services. It has begun work amid a frenzy of lobbying by private insurers and consumer groups. Habilitative services are one contentious area, and they illustrate the challenges faced by the IOM. Unlike rehabilitative services which help people recover lost skills, habilitative services help them acquire new ones.
Habilitative services can help autistic children improve language skills, or those with cerebral palsy learn to walk. They can also help a person with schizophrenia improve his social skills.
These services tend to be expensive because they are provided over several years. Insurers tend not to cover them. Their justification (when one is given) is that they are experimental or educational.
How expensive can habilitative services be? The consultancy Oliver Wyman estimated they can run in excess of $60,000 per year for younger children. These numbers drop substantially once the child becomes more independent.
Insurers rightfully believe that if they are required to provide blanket coverage for such services, the prices of the policies they can offer will be substantially increased.
Lobbying groups like America’s Health Insurance Plans are thus imploring the IOM to keep those 10 categories as broad and non-specific as possible. In this way, they can design “flexible” benefits packages.
Consumer groups and providers disagree. “All of it needs to be spelled out because if it isn’t spelled out it will be denied,” said Andrew Racine, chief of pediatrics at Montefiore Children’s Hospital in an interview.
One possible compromise was offered by Cigna CMO Jeffrey Kang in a statement to the IOM a few months ago. Kang suggested that certain habilitative services should not be included in the so-called “bronze plans,” which are the most basic ones destined to be offered through the exchanges. In Kang’s proposal, habilitative services would be offered on the next tier (“silver”) plans.
Patient advocates say that consumers shouldn’t have to pay extra for habilitative coverage. “Health care for autism shouldn’t be like the sporty option on a car,” said Stuart Spielman, senior policy advisor for Autism Speaks, a patient-advocacy organization.
Racine dismissed this idea. “You don’t know if you will need this stuff. That’s what insurance is all about,” he said.
Here (courtesy of the Wall Street Journal) are the 10 benefits categories that have been designated by the new health law as “essential,” along with selected services that will likely to tough calls for the IOM:
Ambulatory patient services (Varicose vein treatment) Emergency services (Nonemergency care administered in ER) Hospitalization (Total hip replacement) Maternity and newborn care (Fertility treatments) Mental health and substance-abuse disorders (Unlimited length of stay in a facility) Prescription drugs (“Lifestyle” medications such as Viagra) Rehabilitative and habilitative services and devices (Unlimited physical therapy) Laboratory services (Biometric testing, including genetic markers or DNA analysis) Preventative and wellness services (Nutritional counseling) Pediatric services, including oral and vision care (Braces)