Business and consumer advocates are watching closely since they expect the federal package to become a new national standard. Final regulations are months away.

How states will pick a "benchmark" plan

by BenefitsPro staff

The Affordable Care Act aims to ensure that all Americans have access to quality, affordable health insurance. To achieve this goal, the law mandates that health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges), offer a comprehensive package of items and services, known as "essential health benefits."

Under the Department's intended approach, HHS says, states would have the flexibility to select an existing health plan to set the "benchmark" for the items and services included in the essential health benefits package. States 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 state employee health plans; 
• One of the three largest federal employee health plan options;
• The largest HMO plan offered in the state's commercial market.

The benefits and services included in the health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.

Consistent with the law, states must ensure the essential health benefits package covers items and services in at least 10 categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all 10 categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan, to determine the type of benefits that will be included in the essential health benefits package.   

The policy proposed by HHS would give states the flexibility to select a plan that would be equal in scope to the services covered by a typical employer plan in their state. States and insurers would retain the flexibility to evolve the benefits package with the market as innovative plan designs are developed and advancements in care become available, and meet the needs of their citizens.

"More than 30 million Americans who newly have insurance coverage in 2014 will have a comprehensive benefit package," said Sherry Glied, PhD, assistant secretary for planning and evaluation.  "In addition to assuring comprehensive coverage for the newly insured, many millions of Americans buying their own insurance today will gain valuable new coverage, including more than 8 million Americans who currently do not have maternity coverage, and more than 1 million who will gain prescription drug coverage."