Essential Benefits: Making Health Insurance Work For Us

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From USA Today:

By Kathleen Sebelius

For families and small business owners struggling with health care costs and accessibility, help is on the way. The health care law that takes full effect in 2014 will provide a competitive marketplace to buy coverage. In fact, these state-based Affordable Insurance Exchanges are already taking shape. Through these one-stop shops, consumers will be able to see all their options in one place. More than $700 million in exchange grants have been awarded to 29 states.

That’s important because Americans today badly need better insurance options. In the past, finding and enrolling in coverage was often complicated and confusing. Rates could jump by double digits without much warning. Families and small business owners who bought their own coverage were often priced out or locked out of the system. And insurance companies could refuse to cover people with pre-existing health conditions.

The new insurance exchanges and other reforms in the Affordable Care Act mean that insurance companies will have to compete for your business, driving down prices. And, beginning in 2014, all Americans — whether they change jobs, retire early, or start a business — will have a way to access quality, affordable coverage in this new marketplace.

Last month, my department took an important step toward making that marketplace a reality by releasing a proposed approach to “essential health benefits,” the basic standard of coverage that all plans in this marketplace will have to offer.

Comprehensive coverage

This approach will ensure that all plans offered in this marketplace are comprehensive, without the gaps in coverage that too many consumers have faced. Some plans didn’t even cover basic preventive care. Others had so many holes that they provided almost no security if you got really sick. For example, 62% of individual market plans do not cover maternity coverage, 18% do not cover mental health services, and 9% do not cover prescription drugs today.

That’s why essential health benefits are so important. To ensure that no plans offered to small business or individuals have these kinds of gaps, the new health care law outlines 10 areas of basic coverage, prescription drugs, pediatric care and hospital services, which are now offered in good employer-based plans around the country.

For consumers, this means you won’t have to read every line of the fine print to know that the plan you buy will protect you if you get sick. And by establishing a basic standard for coverage, and outlawing discrimination of pre-existing health conditions, insurance companies will have to compete on things like price and customer service.

But we also know that health care is different in every state, and that the coverage that works in Florida might not work in Nebraska. Under the approach we have outlined, states will have the flexibility to pick their own standard from among the most typical, popular and proven employer plans in their own state.

National research indicates that the standard plan options we’ve suggested are currently very similar in every state, and since each state will have to meet the 10 categories laid out by the law, the 2014 essential health benefits will not differ greatly from state to state.

But instead of having to build a health plan from scratch, this approach will give states the flexibility to use proven employer models that have already been priced and purchased in the state.

Progress to be monitored

As the specific benefit plans are developed, we’ll be watching closely to make sure consumers are benefitting. And in 2016, we will evaluate and adjust the guidelines if necessary.

The health reform law also gives us several tools to improve health, deliver better care and lower costs. While our approach to essential health benefits must balance comprehensiveness and affordability, the real opportunity to address cost reduction lies with patient safety, care coordination and quality incentive programs already underway thanks to the Affordable Care Act.

Through these efforts, our ultimate goal is to make sure the insurance market works better for consumers. Insurance needs and health systems vary state to state, and experience tells us that the best way forward is not to mandate a one-size-fits-all answer. Instead, our approach gives states the flexibility to take their own paths, while ensuring they all end up in the best place possible: with an Affordable Insurance Exchange that offers access to comprehensive, quality, affordable health insurance to small business owners and individuals who currently have few good choices in an expensive and broken market.

Kathleen Sebelius is secretary of Health and Human Services. She was previously the governor of Kansas from 2003 to 2009.

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