These conclusions and the committee’s previously listed criteria frame the process, outlined in this chapter, by which this IOM committee recommends that the Secretary define the EHB. The process starts with the content and structure of the typical small employer plan and then broadens the coverage to incorporate ACA-required categories that are not usually found in those packages (Box 5-1). Because the package must be affordable to individual purchasers, employees of small firms, and public funders, the committee recommends balancing the comprehensiveness of the package offered against its potential cost and explores several options for incorporating costs into the EHB definition before recommending a specific approach. Additionally, the committee comments on the issue of secretarial guidance regarding the specificity of the EHB package, “required elements for consideration” as stipulated by Section 1302(b)(4)(A) through (E), and definitions of medical necessity.
Typical Small Employer Policy
The ACA calls for the scope of benefits to reflect those typical of employers today; the committee recommends that the small employer market define what is typical at the outset. The level of specificity in benefit definition varies across insurance plan documents, often making it difficult to assess if a benefit is covered or simply not listed in a plan document. Given the paucity of data to determine typical benefits, the Secretary will likely have to be guided by the contents of plans that provide more detailed coverage information. To make concrete the level of coverage that characterizes current contracts covering millions of employees working for small firms, the committee collected information provided from three major insurers to illustrate which covered benefit inclusions are national in scope and which are covered only in some states because of market conditions and state mandates (Appendix C). The committee was not able to assess whether these are “typical” of the entire small group market, but this plan coverage detail provides a starting point for developing a list of EHB content that can be refined by both additions and deletions during the following steps.
1. Develop the Starting Point for the EHB
a. Start with a typical small employer plan based on available knowledge
b. Develop preliminary service list (with inclusions and exclusions) to fulfill 10 categories
c. Apply the committee-developed criteria and adjust the preliminary list as necessary
2. Incorporate Cost into the Development of the Initial EHB
a. Assess the cost of the package developed in the first step
b. Develop a target budget for the EHB (e.g., national premium target based on typical small employer plan)
3. Reconcile Preliminary List to the Premium Target
a. Publicly identify actuarial expenditures for components for possible tradeoffs
b. Receive guidance on priorities from public deliberation processes and other public participatory processes
c. Review final list by reapplying IOM committee criteria to evaluate the aggregate package
4. Issue Guidance on Inclusions and Permissible Exclusions