Jackie Judd talks with KHN's Julie Appleby about recommendations an Institute of Medicine panel will make to help the Department of Health and Human Services determine just what "essential benefits" insurers will have to cover in health law-mandated marketplaces.
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JACKIE JUDD: Good day, this is Health on the Hill. I’m Jackie Judd. A key piece of the health reform law – one that will affect millions of consumers – will soon take shape. It’s known as the “essential benefits” package, the bundle of benefits that would have to be offered through insurance exchanges, which must be up and running by 2014. Later this week, the Institute of Medicine will release recommendations about what factors the government should consider in drawing up the package. KHN correspondent Julie Appleby has been following the story and is here to give us a preview. Welcome, Julie.
JULIE APPLEBY: Thank you.
JACKIE JUDD: What exactly was IOM asked to do?
JULIE APPLEBY: Well, this is just a first step, in a way. They’ve been asked to advise the Health and Human Services Department on what are the factors they should consider when they’re drawing up an essential benefit package. For example, how do you decide how many visits a person would get for a particular disease or injury? That type of thing. What is the difference between a medical treatment and a non-medical treatment? What are the scientific bases that HHS could use in helping to draw up this package?
JACKIE JUDD: So these aren’t recommendations like, you should include X number of visits to the emergency room?
JULIE APPLEBY: That remains to be seen – how specific this package will get. But that’s not what the IOM is doing; that is going to be up to HHS. They are going to decide what goes in the benefit package. They can take these recommendations - they can use them, they could not use them. But they are the ones that are going to be drawing up what goes in the package, what must be covered. And there’s a big debate. Nobody really knows what they’re going to do, but how specific will they be? Will they really get down to the nitty-gritty on saying, “you must require X number of visits per whatever,” or will it be broader and more general?
JACKIE JUDD: Tell us why this step is still important to millions of consumers.
JULIE APPLEBY: This is going to be very important to millions of consumers, because what’s in the essential benefits package will be what insurers are required to sell, starting in 2014, to anybody who buys their own individual policy in the exchange or to small businesses that buy in the exchange, and also outside of the exchange. So it will affect tens of millions of people.
JACKIE JUDD: During this process, the IOM held a number of public hearings at which stakeholders testified, talking about the kinds of things they would like to see. What was the range of things that you heard?
JULIE APPLEBY: There was quite a range. If you were with a group that was concerned about a particular disease – like cancer, or a condition like obesity, or a condition like autism – those groups were there saying, we really need to cover this. We need to cover it well. We don’t need to set limits on visits.
For example, the cancer community is very concerned that there might be a limit on – you can only have 35 visits a year. Well, if you’re having chemotherapy, maybe you need it every week. And so they don’t want limits set on that.
On the other hand, insurers are saying, we maybe need to set some limits on some things, because that’s one way that we help control costs and we keep premiums down. And the insurers also don’t want the HHS folks to get into a lot of really-specific details, they want a lot of flexibility left up to them. So it really depended which stakeholder you were, but there was quite a range of opinion.
JACKIE JUDD: Is the larger tug of war about those who say, if you make it too expensive, you make it too expensive. If you make it too restrictive, then it will deny many consumers the kind of health insurance that those of us who get it through employers routinely get?
JULIE APPLEBY: There’s a balancing act. The law does say that these plans have to be equal to what a typical employer plan offers. So there are going to be fairly generous plans for the most part. Remember, on the individual market right now, a lot of folks are buying policies that – maybe they don’t cover doctor’s office visits. I was looking at some statistics recently that showed in Maine that 15 percent of people on the individual market have a $15,000 annual deductible. Under the law, those won’t be allowed unless they’re grandfathered.
And so there some restrictions on this, but the more generous you make the package, the more expensive the premiums are going to be, so there’s a fear that people won’t be able to afford it.
JACKIE JUDD: Once the IOM comes out with its report later this week, what happens next? What’s the timetable?
JULIE APPLEBY: That’s not entirely clear. HHS does have to issue final regulations. Some debate about this. Some folks seem to think that they may wait a while, maybe even until after the November elections. Some folks saying, no, it’s got to happen sooner.
Insurers need probably at least six months, maybe a little bit longer, to develop these policies that they’re going to be selling. Remember, they’re going to start selling them in 2014. They need some time. I spoke to somebody at the Chamber of Commerce the other day who said that insurers may need up to two years to develop some of these policies. So time is of the essence, on one hand, and there are some other considerations that may push this off a little bit. So we don’t know exactly when the final regs will come out.
JACKIE JUDD: Thanks so much, Julie Appleby of Kaiser Health News, thank you.
JULIE APPLEBY: Thank you.