Health Care Law Will Let States Tailor Benefits

In a major surprise on the politically charged new health care law, the Obama administration said Friday that it would not define a single uniform set of "essential health benefits" that must be provided by insurers for tens of millions of Americans. Instead, it will allow each state to specify the benefits within broad categories.

The move would allow significant variations in benefits from state to state, much like the current differences in state Medicaid programs and the Children’s Health Insurance Program.

By giving states the discretion to specify essential benefits, the Obama administration sought to deflect one of the most powerful arguments made by Republican critics of President Obama’s health care overhaul — that it was imposing a rigid, bureaucrat-controlled health system on Americans and threatening the quality of care. Opponents say that the federal government is forcing a one-size-fits-all standard for health insurance and usurping state authority to regulate the industry.

Legal challenges
This criticism has inspired legal challenges to the new law — with the Supreme Court set to decide next year whether the government can require Americans to buy health insurance — and helps explain why public opinion of the law remains deeply divided.

The law is looming as a central issue in the 2012 presidential race, with Republican presidential candidates being evaluated on the strength of their opposition to it. The announcement by the administration follows its decision this year to jettison a program created in the law to provide long-term care insurance, a move that disappointed liberal backers of the program championed by the late Senator Edward M. Kennedy.

The action Friday prompted questions among supporters of the new health care law. Prof. Timothy S. Jost, an expert on health law at Washington and Lee University, said, "The new bulletin perpetuates uncertainty about what benefits an insurer will be required to cover under the Affordable Care Act." From the consumer’s point of view, Professor Jost added, "I wish the Department of Health and Human Services had signaled that there would be more uniformity and less flexibility."

Chris Jacobs, a health policy analyst for Senate Republicans, said the new policy "gives states the flexibility to impose more benefit mandates, not fewer," and would lead to higher insurance premiums, contrary to what Mr. Obama promised in the 2008 campaign.

'Essential health benefits'
The new law lists 10 categories of "essential health benefits" that must be provided by insurance offered in the individual and small-group markets, starting in January 2014. These include preventive care, emergency services, maternity care, hospital and doctors’ services, and prescription drugs.

Kathleen Sebelius, the secretary of health and human services, had been expected to provide details of what services and benefits must be provided in each category. Instead, in an insurance bulletin issued Friday, Ms. Sebelius said the federal government would respect the states’ role, giving them "the flexibility to design coverage options that meet their unique needs."

Under this approach, each state would designate an existing health insurance plan as a benchmark. The benefits provided by that plan would be deemed essential, and all insurers would have to provide benefits of the same or greater value. Plans could modify coverage within a benefit category so long as they did not reduce the value of coverage.

Each state would choose one of the following health insurance plans as a benchmark:

¶ One of the three largest small-group plans in the state.

¶ One of the three largest health plans for state employees.

¶ One of the three largest national health insurance options for federal employees.

¶ The largest health maintenance organization operating in the state’s commercial insurance market.

While working on health care legislation in 2009 and 2010, Congress spent many hours debating how to balance the goals of comprehensive benefits and affordable coverage.

Sherry A. Glied, an assistant secretary of health and human services, said the administration’s approach "builds off the experience of today’s marketplace and will minimize disruption to it."

State 'in control'
Steven B. Larsen, deputy administrator of the federal Centers for Medicare and Medicaid Services, said, "The state is always in control of what the essential benefits package is in that state."

In recent months, federal health officials have taken a number of steps that could help inoculate Mr. Obama against charges that he was foisting a rigid, inflexible model of health care on the nation.

Several states have received temporary waivers from tough new federal standards that require insurers to spend more of each premium dollar for the benefit of consumers. Federal officials have also provided temporary exemptions from some provisions of the law for some employers and labor unions offering bare-bones coverage.

The new law says that the scope of essential health benefits must be "equal to the scope of benefits provided under a typical employer plan." But the law itself specifically requires some benefits not widely available in employer-sponsored health plans, like "habilitative services" for people with conditions like autism or cerebral palsy.

Under the new law, each state is supposed to have an insurance exchange or marketplace where consumers can compare options and buy insurance. Health plans must offer the essential benefits, regardless of whether the coverage is sold inside or outside the exchange.

The government will offer subsidies to help low-income people buy insurance through exchanges. The subsidies will help cover the cost of essential benefits. States can require insurers to provide additional benefits, but states will have to pay much of the extra cost.

The law also says that the definition of essential benefits must not "discriminate against individuals because of their age, disability or expected length of life."

Sara Rosenbaum, a professor of health law and policy at George Washington University, said the new bulletin "does not offer any guidance on this crucial part of the law."

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  • by Barlow Location: Winterville on Dec 17, 2011 at 04:00 PM
    I tried to post a link to aid someone who was looking for help for their disabled child, but I guess the person who wanted to call educated people "stupid" was more important. Another public service from WITN.
  • by labotomist on Dec 17, 2011 at 06:40 AM
    Barlow should take advantage of this and get a full frontal labotomy.Only crazy psycos would vote for the annoited one again.
  • by sick of obama and his idiocracy! Location: duplin co on Dec 17, 2011 at 06:38 AM
    this is the most ridiculous "law" ever passed!!!! how is it even legal to "make" all american's buy health care when we can't afford to even pay light bills anymore because of the stupid economy? everything is outsourced which means american's make nothing while china makes everything! i guess i'll be one of the good people in prison for not being able to afford health care...thanks obama...for nothing! i really hope he doesn't get office again in 2012 and that the new president throws out this stupid "law"! it should be illegal for a so called educated man like obama to take office, he's not working for the american people, he's got other motives! i want to know why he and congress don't want their new health care, why do they get better health care, and why is theirs free while we have to pay????? i think "the people" should take over the government and run our own lives! think i'll move to china now!
  • by Barlow Location: Winterville on Dec 17, 2011 at 05:12 AM
    Because of this new health care law, 2.5 million young adults are now covered under private insurance. That means that YOU don't pay many times what it would cost for a doctor's visit, as you did in the past, when they would simply go to the emergeny room to get treated. No more throwing sick people off insurance because it just didn't "pay" the insurance company to cover them anymore. While I don't believe we should have "for profit" healthcare, this is step forward.
  • by Kimo Location: Belhaven on Dec 17, 2011 at 05:02 AM
    What the Feds hath given - the Feds can take away. Beware!!!
  • by mad as he** Location: enc on Dec 17, 2011 at 05:01 AM
    My 80 year old mother went to her doctor to get the physical that Obama promised to seniors. It wasn't a real physical. It was a consultation. Also Medicare doesn't pay for as much as it did. Obamacare must be repealed. Obama and Congress refuse to use it. If it is not good enough for them then it is not good enough for us either.
  • by Anonymous on Dec 17, 2011 at 04:31 AM
    So Obama is going around Congress again and changing a law that is already on the books wihtout them? Does not matter if it is better or worse. If he can do it all as dictator, why are we paying all the senators and congress people and their staff?
  • by WhyILoveobama on Dec 17, 2011 at 03:50 AM
    I want to know how people are supposed to pay for this mess in a couple of years if obama is still prez.He is the record breaker in food stamps and unemployment so once again how are the poor that cant pay for this supposed to pay?...I have had health care and a job all my life until this idiot took his throne.Guess he better borrow more money from china and let illegal immigrants build prisons for us once law abiding citizens.Thats WhyILoveobama.
  • by Harry Location: Goldsboro on Dec 17, 2011 at 03:41 AM
    Horse Puckey! This is a political ploy - give in on an item for a few months and then his (Obama's) socialist cronies will be back at it full tilt. Time delayed incrementalism is all it is. Just like the House bill where the Republicans supposedly won on the concession on the pipeline from Canada to the Gulf. If after 60 days the president decides it is not in the best interest of the nation he can stop the process again. What a bunch of DC Hooey! The only thing more crooked than the Democrats is the Good Ole Boy Republicans setting at the bar after the political fray slapping their collusionist Democrat Buddies on the back and congratulating themselves on how they pulled another one over their dimwitted constituents.
  • by Tyrone on Dec 17, 2011 at 03:39 AM
    This sure is a lot of bull to start out a Saturday morning!
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