Essential Health Benefits Will Not Raise Insurers’ Cost, Study Says

Adopting essential health benefits under the Affordable Care Act will not require insurers to make significant changes or raise costs, according to a study released Wednesday by the Robert Wood Johnson Foundation and the Urban Institute, The Hill's "Healthwatch" reports.

Starting Jan. 1, coverage sold through the ACA's health insurance exchanges must cover 10 categories of essential health benefits, such as prescription drugs and maternity care. Some critics of the law said the mandate would be burdensome and force insurers to raise prices.

For the study, researchers surveyed regulators and insurance industry officials in five states to determine how the EHB mandate is being applied (Baker, "Healthwatch," The Hill, 8/14). Three of the states -- Colorado, New Mexico and Oregon -- are establishing their own exchanges, while two -- Alabama and Virginia -- have opted for a federally run exchange (Bunis, CQ HealthBeat, 8/14).

Overall, the researchers found that states are on track to enforce the new requirements and generally were able to enact the changes without difficulty. Regulators in each surveyed state also reported that the requirements "did not result in a major market change," according to the study ("Healthwatch," The Hill, 8/14). The authors wrote, "Insurers and regulators in most study states reported that the shift to an EHB standard would cause minimal change or disruption."

However, the researchers noted that states -- such as Colorado and New Mexico -- that already had significant benefit requirements are finding it easier to shift to the new standards compared with those -- such as Virginia -- that had fewer requirements (CQ HealthBeat, 8/14).  For example, regulators in Virginia said that adopting EHBs would be a significant change because plans in the state typically do not cover prescription drugs or maternity care ("Healthwatch," The Hill, 8/14).

In addition, the study found that although the ACA gives insurers the flexibility to substitute some covered benefits, most "plans will closely resemble the benefits, limits and exclusions prescribed in the benchmark package" (CQ HealthBeat, 8/14).

Exchange Plans To Offer Limited Provider Choices

In related news, many insurers selling plans through the exchanges will offer consumers limited networks in an effort to control premiums, the Wall Street Journal reports.

An analysis by McKinsey of 955 exchange plan filings from the first 13 states to release the data found that 47% of plans were health maintenance organizations or similarly designed plans, which typically do not cover out-of-network services. Further, some plans will add other limits, such as requiring consumers to obtain referrals to see specialists or get prior approval for costly procedures.

WellPoint said most of its exchange plans would feature more limited networks. The company said that limited networks "have the potential to produce cost savings and continue to offer quality care and convenience."

Meanwhile, Steve Hamman -- vice president at Blue Cross and Blue Shield of Illinois -- said the company's exchange offerings with smaller provider networks would cost 20% to 30% less than those with large provider networks.

Although most consumers will be able to choose from both small- and large-network plans on the exchanges, for some -- such as those in New Hampshire, where WellPoint is the sole carrier in the exchange -- smaller network plans might be the only option. WellPoint said its New Hampshire plans will include 14 of the 26 hospitals and 65% of the primary care physicians in its largest preferred-provider organization network.

According to the Journal, insurer-sponsored research involving tens of thousands of respondents has found that although U.S. residents traditionally have been reluctant to accept fewer health care choices, individuals who will purchase coverage on the exchanges are willing to trade off provider choice for lower premiums (Wilde Mathews, Wall Street Journal, 8/14).