IOM Panel Proposes Essential Benefits for Health Plan Exchanges
On Thursday, an Institute of Medicine committee emphasized that affordability should be HHS' main priority in its recommendations to the agency on how the basic coverage standards for the state-based health insurance exchanges should be established, the New York Times reports (Pear, New York Times, 10/6).
Under the federal health reform law, states by January 2014 must create insurance exchanges that provide coverage options for individuals and small businesses. States can choose to administer their own exchanges -- for which they must have some infrastructure in place by January 2013 -- or ask the federal government to run the exchanges for them (California Healthline, 9/20).
The IOM committee also noted that the cost of any new benefits should be "offset by savings" elsewhere in the health system.
The panel said, "Unless we are able to balance the cost with the breadth of benefits, we may never achieve the health care coverage envisioned in the [health reform law]," adding, "If the benefits are not affordable, fewer individuals will buy insurance" and "if health care spending continues to rise so rapidly, the benefits will begin to erode" (New York Times, 10/6).
Details of IOM Recommendations
The report recommended that only medically necessary services be covered (McCarthy, National Journal, 10/6).The panel did not outline the types of benefits that HHS should include in the health plans offered through the exchanges, according to the Wall Street Journal (Radnofsky, Wall Street Journal, 10/7).
However, the committee included guidelines for HHS on how to define essential benefits, noting that minimum benefits should reflect those provided by small employers in the private market, rather than by large or medium-size employers that offer more generous coverage. It said federal officials also should determine what the national average premium of a typical small employer plan in 2014 would be and attempt to limit the national average cost of essential benefits below that threshold.
The committee also said that the federal government generally should not require the coverage of new treatments unless they demonstrate "meaningful improvement in outcomes over current effective services."
Response to Recommendations
According to the Times, the committee's recommendations likely would please employers and insurers but cause some concern for patient and consumer advocates (New York Times, 10/6).
In a statement welcoming the proposals, America's Health Insurance Plans CEO Karen Ignagni said, "IOM is urging policymakers to strike a balance between the affordability of coverage and the comprehensiveness of coverage," adding, "The recommendation that the initial [essential health benefits] package reflect the scope of benefits and design provided under a typical small-employer plan is an important step toward maintaining affordability" (National Journal, 10/6).
However, Marc Boutin -- executive vice president of the National Health Council, which represents specialized disease advocacy organizations -- said he hoped that IOM would make more explicit recommendations for a broad range of coverage, adding that NHC "strongly encourage[s]" HHS to consider suggestions from patients groups (Wall Street Journal, 10/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.