Essential Health Benefits (EHBs) are one of the most important aspects of the ACA’s transformation of the individual health insurance market (they also apply in the small group market, but group policies have historically been more benefit-rich than plans sold in the individual market). In the past, insurers were given tremendous leeway in plan design; mandates and regulation varied considerably from one state to another. Most policies in the individual market did not include maternity coverage (Colorado mandated maternity coverage in 2011, but prior to that there were very few policies available with maternity benefits in the individual market), and some shady carriers were selling policies with more holes than a slice of Swiss cheese. Carriers could also impose annual and lifetime limits on benefits, so even if a plan “covered” certain treatments, it was entirely possible that a very sick patient could exceed the policy’s maximum benefit. All in all, the individual market was badly in need of reform. There were plenty of good policies available, but there were also lots of bad policies out there, and it was sometimes tough for consumers to tell the difference until they found themselves in dire need of healthcare and found out that their policy had significant gaps in coverage.
Enter the Affordable Care Act and its Essential Health Benefits. All new policies – both in and out of the exchange – with effective dates of January 1 or later have to provide coverage for ten “essential” areas of treatment, with no annual or lifetime caps (a few types of care can have limits on the number of visits or days that are covered – be sure to read your policy carefully and ask questions). Keep in mind that “cover” does not mean “pay for” – in many cases, you’ll find that these services are only paid by the insurance carrier after you’ve met your deductible. But since they are covered services, any amount that you pay yourself counts towards the deductible. Pay attention to your plan design to see how the cost-sharing is arranged on your policy for essential health benefits and other services – it varies quite a bit from one plan to another.
So what are essential health benefits?
- Ambulatory patient services – this is outpatient care (a surgery center is an example) and also includes home health and hospice care (plans are allowed to place limits on the number of days that are covered).
- Emergency services, including emergency care received at an out-of-network facility.
- Hospitalization
- Laboratory services, including both diagnostic and preventive lab work. Some preventive lab tests are covered with no charge, while diagnostic tests will be covered at the level designated by your policy.
- Maternity and newborn care, including prenatal care, delivery, and newborn care.
- Mental health and substance use disorder services, including behavioral health treatment. This includes both inpatient and outpatient care, but some plans may place a limit on the number of days covered in an inpatient facility).
- Prescription drugs
- Rehabilitative and habilitative services and devices. This includes physical and occupational therapy (at least 30 visits per year), speech therapy (at least 30 visits) and cardiac rehab (at least 30 visits).
- Preventive and wellness services and chronic disease management, including many services that are covered with no copays or deductibles.
- Pediatric services, including dental and vision (pediatric dental is a slight exception to the essential health benefits rules: in many states, if you buy your coverage in the exchange, you do not have to purchase pediatric dental. If you shop outside of the exchange, you must have pediatric dental. More info here, with Colorado-specific details).
Gone are the days of health insurance policies that don’t cover maternity or prescription drugs, or leave patients high and dry when they need outpatient surgery. The EHB requirements make it much easier to compare policies and also provide much more peace of mind once you have a policy in place. There are no more “junk” policies for sale starting in 2014, regardless of where you shop.
Although we’ve taken great care over the years to work only with reputable carriers selling high quality plans, we were always aware that there were plenty of inferior plans on the market as well. Those plans are no longer for sale as of January 1. Regardless of whether you purchase a plan through Connect for Health Colorado (we can help with that) or outside of the exchange (we can help with that too), you’ll know that you’re getting a high quality plan that covers the essential health benefits and provides a true safety net in case you have a serious illness or injury.