Essential Health Benefits Balancing Affordability and Adequacy Kavita

Essential Health Benefits: Balancing Affordability and Adequacy Kavita Patel MD, MS Engelberg Center for Health Care Reform The Brookings Institution February 3, 2012 Washington, DC kpatel@brookings. edu

Issues to Consideration • Legislative Intent- set floor not ceiling? • This is NOT benefit design (next slide) or benefit administration – Outstanding issues around cost containment strategies, alignment with delivery systems • Governance/Administration – Medical necessity – Basis for evidence review, etc – Oversight and monitoring – Premium Issues 2

Various Benchmark Plans Annual Deductible Benchmark Plan Small Group Insurance Products in State’s Small Group Market State Employee Health Benefit Plan (Colorado State Plan) Federal Employee Health Benefit Plan Commercial Non. Medicaid HMO in State Copays for Office Visits $750 -1500 $1, 500 $350 no deductible Coinsurance for Lab and XHospital Ray $30 $15 $20 20% $100 plus 15% coinsurance $250 Prescriptions 20% 15% Tiered copay for prescriptions ($10 for generic, $25 for brandname drugs on the plan’s formulary, $50 for brand-name drugs not on the formulary) 15% coinsurance for generic prescription drugs, higher for non-generics Three tiers of copayments for prescription drugs ($10 for generic, $25 for brand-name No cost-sharing for drugs on the plan’s formulary, lab or x-ray $50 for brand-name drugs not on the formulary) 3

Implications for Various Stakeholders • States – Variations in benefits and access to elements of care including behavioral health treatment, habilitative services, and routine pediatric oral/vision care – Legislative complications • Insurers – Flexibility – Lack of uniform standard • Patients and Families – Provide consumer feedback • Policymakers – Oversight and guidance for exchanges – Appeals process 4

Opportunities for Various Stakeholders • Researchers – Development of methods for comparative effectiveness research – Better understanding of rapid cycle evaluation and its role in modifying an EHB at a federal and state level • Health Care Leaders – Act as the catalyst behind CMMI’s pilots and evaluation efforts – Affordability • State-Based Exchanges – Laboratories for initiatives – Increase consumer engagement 5

Thank you kpatel@brookings. edu