Remember all that talk during the health reform debate about why men should have to pay for maternity care? What politicians were really arguing about was the "essential health benefits" provision in Obamacare.
In an attempt to make the insurance marketplace fairer and more viable, the law required insurance plans sold in the individual market, the fully insured small-group market, and through Medicaid expansion to cover a list of 10 "essential health benefits." The 10 included pretty basic medical care — like pregnancy and maternity care, mental health and addiction treatment, and lab tests.
Republican Congress members have been consistent about their desire to scrap this part of the law. It has driven the cost of premiums up, and, they argue, limited Americans' freedom of choice.
Now, with a new Obamacare repeal and replace plan under consideration, they'll have another shot at doing away with the EHBs, as they're called among health wonks. In a push to win support from the Freedom Caucus members, the latest draft of the American Health Care Act would reportedly get rid of the law's EHB requirement for the individual and small-group markets. (The previous drafts of the American Health Care Act already did away with the EHB requirement for Medicaid expansion enrollees.)
Getting rid of the EHBs could mean the unraveling of the individual insurance marketplace and a return to even skimpier plans than those that abounded before Obamacare. It would also have the cruel effect of leaving the people who need insurance the most unable to afford it once again.
Before we get into the politics and public health impact of the provision, let's understand what the EHBs cover. They are about as basic as they sound. Here's the full list, from Healthcare.gov:
- Outpatient care without a hospital admission, known as ambulatory patient services
- Emergency services
- Pregnancy, maternity, and newborn care
- Mental health and substance use disorder services, including counseling and psychotherapy
- Prescription drugs
- Rehabilitative and habilitative services and devices, which help people with injuries and disabilities to recover
- Laboratory services
- Preventive care, wellness services, and chronic disease management
- Pediatric services, including oral and vision care for children
Things like dental and vision care for adults aren't on here, and the law only requires plans to cover one drug in a therapeutic class. But the list is pretty comprehensive when you think about what people get on large-group
These benefits made health care more equitable and insurance plans more viable
They mostly came about to address problems in the insurance risk pool that other parts of the health law created. The ACA said insurers could no longer discriminate against people on the basis of their health — so they could no longer deny someone coverage because they were sick with a "preexisting condition." The law's individual mandate also required everybody to buy insurance.
So all Americans were suddenly eligible for insurance, including sick people, and everybody had to buy coverage. But no insurance company would want to attract all the sick or expensive people looking for the kind of comprehensive coverage they would need.
To even out the playing field and standardize what types of insurance people had to buy, the ACA included this pretty high level list of benefits. Plans on the individual and small-group marketplace had to cover these basics, and do so at standardized levels of generosity, known as the metallic tiers including bronze, silver, gold, and platinum. (As Brookings explained, each tier has a higher value and covers more of the expected spending: from 60 percent in the bronze plans to 90 percent for platinum plans.)
This made the individual marketplace more viable. Requiring everyone to pay a little more for the EHBs evened out the risk among insurers who suddenly had to take on sick people.
"This is a risk pooling issue," said Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute. "It makes sure everybody has affordable access to this array of benefits, and that way the cost of providing those services is shared across this larger pool of people."
This also made health insurance more equitable. The average cost of plans went up, but more people could access more care. Insurance policies on the individual and small group markets finally covered the core set of benefits that come through standard employer plans or through Medicare or Medicaid. It also meant an end to all the shoddy insurance plans that lacked the basics.
So the EHB requirement put an end to the very skimpy plans that allowed people to end up in a hospital and leave with massive bills because their hospital stays weren't covered. And it meant new moms who were buying insurance on the individual marketplace didn't have to worry about where their health care would come from.
"The EHBs in the ACA were in part a reaction to the fact that some insurance plans previously had holes in them," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation. "And people didn't know or even understand the gaps they were buying into."
Politically, this Obamacare provision has been pretty unpalatable to those on the right. Because insurers were guaranteeing coverage for more services, the essential health benefits drove the average cost of premiums up.
They also created a sense of solidarity — that everyone should share in the cost of health care. But Republicans have opposed the idea that the government should dictate that people buy coverage they don't want and may not need. (Remember that old question about why men should have to pay for maternity care.) They've advocated that everybody should be able to choose "the plan that's right for them." And from this view, the essential health benefits seem like an assault on that freedom of choice.
So doing away with this provision or punting the decision to the states would address a thread that's been running through the health care debate about whether we should be pooling risk among the sick and the healthy.
"The issue here is a core philosophical one," said Blumberg. "Do we want people who have needs for services paying for the bulk of those services themselves or do we want to spread the cost of necessary services across a broader population so those services are affordable and accessible for everyone when they need them."
Republicans generally oppose the government intervention, and dislike the cost-sharing the ACA created. Leaving the essential health benefits requirement to the states would address those issues, potentially helping move this deeply unpopular replacement plan through Congress.
So Republican dislike of the list is why the GOP is now seizing on the chance to amend the provision in Obamacare. The hope is that more Republicans will get on board with the American Health Care Act if the EHBs are done away with.
There's just one small problem: The individual insurance marketplace could unravel without them.
Remember how the EHBs made the marketplace viable, because they helped pool risk among the whole of the population, requiring everybody to pay a little for basic health care even if they aren't going to use it, instead of just attracting sick people who may need those services?
"Without these requirements, you are looking at an individual market where the only policies available are extremely skimpy or expensive," said Matthew Fiedler, a fellow at Brookings who served as chief economist of the Council of Economic Advisers, where he oversaw work on the Affordable Care Act. In the past, insurers had strong incentives to design plans in ways that were unattractive to people with predictable health needs or sick people. And getting rid of the essential health benefits, Fiedler said, "would give them a powerful tool to avoid people that expect to need care."
Within two or three years, Blumberg expects more comprehensive coverage plans to dry up. Since insurers can't deny coverage outright, and many will be tempted to go down to more limited polices that attract healthy people, insurers offering comprehensive policies would likely attract more sick expensive patients, which would create a selection problem and make the plans unsustainable.
Getting rid of EHBs would also make the promise of covering people with preexisting conditions meaningless. If a cancer patient or person with diabetes can get coverage but the cost of their chemotherapy or insulin isn't covered, that coverage isn't meaningful anymore, Blumberg said.
So, if states decide to water down the list of EHBs or not implement them at all, we could see more policies that don't help people with chronic diseases like cancer pay for their treatment, don't help pregnant women pay for their maternity care, and don't help pay for people who need mental health or addiction treatment, or who wind up in the hospital.
From a public health perspective, the prospect of thinning out EHBs is frightening. For example, the US already has some of the worst maternal health outcomes of all the countries in the developed world. We are also facing an opioid crisis, and suicide rates have been rising along with drug prices.
Getting rid of coverage would mean these health services are out of reach for many people again. This would happen at a time when we are seeing the death rate edge up for large swaths of the American population.
There also would be little economic benefit. While the move may bring the average cost of premiums down, as the LA Times' Michael Hiltzik explains, it would "drive costs for people who need those services sky-high and transfer much of the cost to other public programs. The net gain for society is almost invisible."
Republicans want Americans to choose "the plan that's right for them." What they are proposing, though, doesn't sound like freedom. It sounds more like a lot of people will lose their coverage or have more limited health care options in front of them. But maybe that's the point.