Essential Health Benefits: Will the Minimum Coverage Plan Cover Cancer Patients?

Sydney Abbott, JD
Policy Coordinator, Association of Community Cancer Centers

Beginning in 2014, state health insurance exchanges will offer consumers a more organized and competitive market for buying health insurance. Essential health benefits (EHBs) are the minimum benefits that must be covered by any insurance policy, known as a qualified health plan, offered on the state health insurance exchanges.

Once they are up and running, these exchanges will offer a choice of health plans, will certify participating plans, and will provide information to help consumers better understand their options. However, the proposed flexibility of the health exchange design raises questions about access to care for patients with cancer.

After 2 prerule bulletins and months of waiting, the US De­-partment of Health and Human Services (HHS) finally released the proposed rule defining the EHBs package and actuarial value for health plans operating in the new health insurance exchanges. As it stands now, states may choose to develop their own state-based health exchange or default to a federally run exchange. States that opt to develop their own exchange must define the minimum, or essential, benefits provided by all of the plans operating in the state exchange.

The release of this proposal gives us the first indication of the plan offerings that may be available through the health insurance exchanges. It is imperative to ensure that the minimum benefits do not leave patients with cancer underinsured. A weak EHBs rule may leave patients unable to pay for high-cost care.

Although the Affordable Care Act (ACA) mandates a set of benefit categories, it assigns the Secretary of HHS the task of describing the baseline benefits that must be included in every EHBs package, whether it is state or federally run. It is generally believed that cancer care will be covered by a state’s EHBs package, but the HHS has failed to propose specific rules to ensure that the coverage is comprehensive and adequate.

Flexibility in Benefit Design

The proposed EHBs rule leaves most of the decision-making up to the states, which may select their largest small-group plan or a num­ber of other plans. It is generally ap­preciated that governors have the flexibility to select and tailor a health insurance exchange based on the plans that are already available in the state. However, it is worrisome that states may not ultimately select a benchmark plan that is robust enough to adequately cover patients with cancer. It is impor­t­ant to remember that under the ACA, a state may elect to identify a more ro- bust EHBs package than is required from the HHS; however, the state will bear the cost of providing those additional benefits. I think that this option will be reserved for states that already have a history of protecting patient access to care through state-run programs.

This flexibility for the states—and insurers—is particularly problematic in the proposed design for prescription drugs. In previously released EHBs bulletins, the HHS suggested requiring all plans to provide coverage of 1 drug for each drug class of the Medicare Part D’s 6 protected therapeutic classes (ie, immunosuppressant, antidepressant, antipsychotic, anticonvulsant, antiretroviral, and antineoplastic). Medicare Part D covers all or nearly all of the drugs in these 6 classes.

The Association of Community Cancer Centers (ACCC), along with many state oncology societies, recommended a benefit design comparable to Medicare Part D in its official comments on the proposed EHBs rule. However, the HHS has not yet outlined this robust coverage. Instead, the HHS is proposing to allow the states to offer as little as 1 drug per US drug category.

In addition, the proposed rule does not provide guidance to the states on how to handle specialty drug tiers, nor does it address cost-sharing control for orally administered anticancer medications. It is anticipated, for example, that the bronze-level plan offered through an exchange, which will contain the minimum benefits offered, may have a 20% coinsurance, with a more than $4000 deductible. Without necessary cost-sharing protections, the HHS proposal could translate into a minimum benefits plan that leaves a patient with cancer grossly underinsured.

Actuarial Value

Assuming that the states elect a benefit design that adequately covers patients with cancer, those patients still may be unable to receive the most appropriate care because of a high deductible or a high coinsurance. The way that states will determine patient cost-sharing for the various plans depends on the actuarial value associated with each plan.

Actuarial value is calculated as the percentage of total average costs for the covered benefits that a plan will cover. Therefore, a plan with an actuarial value of 70% means that the patient will be responsible for 30% of the cost of all covered benefits.

Under the proposed EHBs rule, nongrandfathered plans in the exchange will be awarded “medal levels” based on their actuarial value percentages, with a 2% variance allowed. For example, bronze-level plans will have an actuarial value of 60%, silver-level plans will have an actuarial value of 70%, gold-level plans will have an actuarial value of 80%, and platinum plans will have an actuarial value of 90%. Clearly, a patient with cancer who is responsible for 40% of the cost of care will be quickly limited in the treatment that patient receives.

Final Rule Expected

The ACCC aired its concerns for patients and providers by submitting official comments to the HHS on the proposed rule, and the HHS is in the process of reviewing the comments from all of the stakeholders and will release final guidance on the EHBs shortly. As always, the ACCC will keep its members informed of any developments.

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