EHBs Vary Widely From State To State


Essential health benefits (EHBs), those 10 categories of health services that must be covered by new plans sold on the individual market or to small groups, vary considerably from state to state. This is by design, since the Department of Health and Human Services (HHS) is allowing each state to define its own EHBs in 2014 and 2015 using an existing benefits package offered by the state’s “benchmark plan.”

Quantitative limits imposed on EHBs in some states may even reach the actuarial equivalent of previously-imposed dollar limits, according to a recently-released report by the Robert Wood Johnson Foundation (RWJF) and the University of Pennsylvania’s Leonard Davis Institute of Health Economics (LDI). Adding to the variation in EHBs across the U.S. is the fact that states have historically had widely varying mandates for services that had to be covered by health plans (other than self-insured plans). Also, state mandates for non-uniform benefits, such as treatments for autism, infertility, or acupuncture, differed in both coverage and treatment limits. The result is that, for 2014 and 2015, EHBs are the sum of old state mandates plus each state’s choice of a benchmark plan.

Benchmark plans. According to HHS regulations issued pursuant to the Patient Protection and Affordable Care Act (ACA), a state’s benchmark plan could be either one of the three largest plans in the state’s small-group market, one of the state’s three largest state employee plans, one of the three largest Federal Employees Health Benefit Program options, or the state’s largest non-Medicaid HMO. States not choosing their own benchmark plan default to their largest small-group plan.

The LDI says in the report that 45 of 50 states opted for one of the state small-group benchmark plans, which would automatically include state-mandated benefits. This is not surprising, since, as the report points out, choosing plans that include state-mandated benefits allows states to avoid the financial and political ramifications of repealing existing state mandates. The HHS will apparently re-evaluate the strategy of allowing for the variation of EHBs from state to state for 2016.

Condition-specific services. The LDI found that chiropractic care was the most frequently included non-uniform benefit included in states’ EHBs (in 45 states), while acupuncture and weight loss programs were rarely included (in five states). California, interestingly, included acupuncture, but not chiropractic care. Twenty states included routine foot care. Other non-uniform benefits included in states’ EHBs include treatment for temporomandibular joint disorder (TMJ) (31 states), hearing aids (26 states), autism services (25 states plus the District of Columbia), nutrition counseling (25 states), bariatric surgery (23 states), infertility treatments (19 states), and private-duty nursing (19 states). The LDI characterized some states as belonging in “expansive” categories, because they provide at least eight of the above services. These include Illinois, New Mexico, and Nevada. Less expansive states that include just one or two categories include Alabama, Idaho, Nebraska, South Carolina, Pennsylvania, and Utah.

Quantitative limits. Although the ACA prohibits annual or lifetime dollar limits on EHBs, the LDI points out that states with mandates that included dollar limits could now, instead, impose non-monetary limits, in the form of episodic, yearly, or lifetime limits that could amount to the actuarial equivalent of the previous dollar limits. For example, all states have home health care as an EHB, but both Oklahoma and Utah limit coverage to only 30 days/visits per year. On the other end of the spectrum, Montana’s limit is 180 days/visits per year. The average for all states is 83.6 days/visits per year.

The LDI also highlighted the fact that, although Alabama and Illinois both define EHBs as including chiropractic care, they both impose dollar limits on it ($600 and $1,000 per year, respectively), which is not allowed for EHBs under the ACA.

It will be interesting to see what the HHS comes up with for its EHB strategy after 2015. It is possible that it will at least partially implement the Institute of Medicine’s recommended process for the establishment of a single national benefit package, which includes annual updates of EHBs, flexibility, and a high level of transparency.

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