States may decide whether health plans sold to the uninsured have to cover more benefits than those offered by a small business when provisions of the 2010 health-care law take effect, the U.S. said.
The law required Health and Human Services Secretary Kathleen Sebelius to develop a list of “essential benefits” that insurers will have to cover beginning in 2014, when taxpayer-subsidized plans will be available to the uninsured in new state-based marketplaces called exchanges.
States will decide coverage levels, according to guidelines issued today. They may benchmark plans offered in the exchanges against small business plans in the state, state employee plans, federal employee plans or the largest commercial managed-care plan.
“Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs,” Sebelius said in a statement.
Small business plans sometimes offer less-generous benefits than government employee plans and those offered by large employers. Plans in the exchanges could “modify” the benefits they offer “so long as they do not reduce the value of coverage,” according to a document explaining the policy.
While state and federal employee health plans cover prescription drugs, 16 percent of small business plans offer the coverage as an option at added cost, according to a study Sebelius’ agency conducted.
“Coverage that works in Florida may not work in Nebraska,” Sebelius said in a conference call with reporters.
The policy “exempts the administration from building an essential benefits package of its own,” said Stephen Finan, senior director of policy for the Cancer Action Network, in a statement. The quality of care for cancer patients is “less certain” under small business and state employee plans than under the federal employee health plans, he said.
Every plan will have to cover 10 areas, such as hospitalization and pediatrics, that Congress identified when it wrote the health-care law, said Sherry Glied, assistant secretary for planning and evaluation, at the department.
Lobbyists will focus efforts on trying to persuade states to adopt narrow packages of required benefits, said Neil Trautwein, a vice president at the National Retail Federation in Washington.
The policy “shifts the argument back to the state arena where insurance has always been regulated,” he said in a phone interview. He called the announcement a “trial balloon” because Sebelius issued it as guidance, not as a rule. Regulations used to enact the policy into law won’t come until next year, once the department weighs public reaction.