What do Obamacare plans cover? It really depends on the state

Move to Arizona for foot care, but California for acupuncture

While all plans sold through the ACA exchanges must cover "essential" services, the definition of those essential health benefit (EHB) varies significantly from state to state, according to a new report from the Robert Wood Johnson Foundation (RWJF).

Background on ACA plan requirements

Health insurers that participate in the exchanges must offer plans that include benefits from 10 categories of EHBs:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services;
  • Prescription drugs;
  • Rehabilitative and habilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management; and
  • Pediatric services.

However, instead of defining a national benefits package, HHS allowed each state to select its benchmark plan from a set of plans in their state. The benefits included in the benchmark plan are considered the EHB for plans sold through the exchange in that state.

The benchmark plans used in each state include:

  • The largest plan in the small-group market, which 25 states defaulted to;
  • One of the three largest plans in the small-group market,  which 20 states and Washington D.C. selected;
  • One of the state's three largest state employee health plans, which two states selected; and
  • The state's largest non-Medicaid HMO, which three states selected.

More insurers will join the exchanges next year

As a result, wide discrepancies exist between various states' benefits.

Different state, different EHBs

For the RWFJ report, researchers at the University of Pennsylvania examined the EHB packages required in each state and found that:

  • 45 states include chiropractic care;
  • 26 include autism spectrum disorder services, like applied behavioral analysis;
  • 26 include hearing aids;
  • 25 include nutrition counseling;
  • 23 include bariatric weight loss surgery;
  • 20 include routine foot care
  • 19 include infertility treatments;
  • Five include weight-loss services; and
  • Five include acupuncture (RWJF report, October 2014).

According to study co-author Janet Weiner, the "arbitrary" coverage decisions reflect the political issues and priorities for each state. In many states, providers and patients fought to get certain services to be labeled "mandatory," while oftentimes employers and insurers opposed designations that could raise costs.

Bloomberg Businessweek's John Tozzi notes that insurance companies have little incentive to offer benefits that are not required because it encourages "adverse selection." If just one insurer covers a particular benefit, all the individuals who need that benefit will choose that plan.

From our experts: Where providers stand with narrow networks—and where they're going

While HHS will continue the "state-by-state" approach next year, federal health officials could recalibrate in 2016, but Weiner acknowledges that doing so "could be a messy battle" (Tozzi, Bloomberg Businessweek, 10/22; Pradhan, PoliticoPro, 10/21 [subscription required]); Herman, "Vital Signs," Modern Healthcare, 10/21 [subscription required; RWJF report, October 2014).

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