Almost No Existing Health Plans Meet New ACA Essential Health Benefit Standards

Maternity & Pediatric Care Especially Lacking from Existing Plans

Given that health insurance plans will have to meet new minimum coverage standards starting in 2014, HealthPocket examined the current marketplace of individual health plans to measure the market disruption that will occur as these plans are replaced by plans compliant with the new standards.

Our research took the Affordable Care Act’s Essential Health Benefits as our starting point. The Essential Health Benefits are the minimum categories of health insurance coverage that every qualified health plan must have starting January 1, 2014. HealthPocket then examined 11,100 individual health plans across the United States to see how many plans had coverage in each of the Essential Health Benefit categories.¹

The data shows that there will be a near complete transformation of the individual and family health insurance market starting in 2014. Less than 2% of the existing health plans in the individual market today provide all the Essential Health Benefits required under the Affordable Care Act (ACA).²

On average, the health plans provided 76% of the ACA’s Essential Health Benefits.³ Benefits such as hospitalization, emergency care, and ambulatory services (such as visits to a primary care doctor or specialist) were covered by almost all plans in one form or another. A more detailed analysis of our results revealed that the missing 24% of Essential Health Benefits were concentrated around a few categories.

Dental and vision care for children was the least likely of the Essential Health Benefits to be provided in base benefits for a health insurance plan. Only one out of four plans nationally had these benefits within their base coverage. Looking at these benefits at a more granular level revealed that only 8% of plans provided coverage for dental check-up services. Maternity coverage was nearly as infrequent as pediatric dental and vision coverage. Two thirds of health plans did not offer their beneficiaries prenatal, delivery, and postnatal healthcare coverage. Substance Use Disorder Coverage was frequently absent in health insurance coverage as well. Only half of plans covered inpatient and outpatient services for substance use issues (e.g. alcohol or drug addiction). Mental health coverage was slightly better with six out of ten plans covering inpatient and outpatient treatment.

The below table illustrates national coverage for each Essential Health Benefit. If a benefit was optional within a plan and required an additional charge, it was not included.

State Averages

Data not weighted by enrollment

It is important to note that in 2014 some states may have broader requirements for Essential Health Benefits than others because each state has some influence on the details within each Essential Health Benefit category. The Affordable Care Act requires that Essential Health Benefits be equivalent to the coverage offered by a "typical employer plan" within a state.⁶ States determine their benchmark "typical employer plan" from several available options (e.g. the state’s small group private health plan with the largest number of beneficiaries). The practical consequence of this could be one state’s definition of Drug Coverage including two drugs in each therapeutic category while another state may require four drugs.

Implications for Health Insurance Premiums?

One of the questions raised by the results of this study is whether the coverage expansion required by the ACA will cause premiums to rise in 2014. Although the answer to that question is beyond the scope of this study, premiums could rise due to a combination of factors, including:

• The closing of the coverage gap as described in this study
• Guarantee issue provisions that will allow people with pre-existing medical conditions to enroll in health plans
• ACA actuarial value requirements on the maximum out-of-pocket costs that can be charged to beneficiaries

METHODOLOGY

Results of the study were based on an analysis of 11,100 health insurance plans for individuals and families under the age of 65. Plans from the Medicare, Medicaid, and employer-based health insurance markets were not included within this study. The data used in this study was obtained from insurance records made public by the Department of Health & Human Services. The data was collected on March 3, 2013.

Plan attributes were examined for each of the Essential Health Benefit categories for coverage (including limited coverage). The mental health services and substance use disorder services category was split into two separate categories in order to provide a more detailed analysis of these benefits. The health plan attributes examined for each of the Essential Health Benefits were as follows: Ambulatory Coverage: primary care visit, other practitioner visit, specialist visit, outpatient facility, outpatient physician, and home health care; Emergency Care Coverage: emergency room, emergency transportation, and urgent care; Hospitalization Coverage: hospital facility, and hospital physician; Maternity Coverage: prenatal care, delivery, post natal care, and in-network coverage; Mental Health Coverage: mental health outpatient services and mental health inpatient services; Substance Use Disorder Coverage: substance use disorder outpatient services and substance use disorder inpatient services; Prescription Drug Coverage: generic drugs, preferred brand name drugs, non-preferred brand name drugs, and specialty drugs; Rehabilitation & Habilitation Coverage: inpatient rehabilitation, habilitation, and durable medical equipment; Lab Tests: diagnostic tests and imaging; Preventative Coverage: preventative care services; Pediatric Coverage: children’s dental check-up, children’s eye care, and children’s glasses. The selection of these attributes were guided by a previous government study comparing Essential Health Benefits in Small Business Health Insurance.⁷ Optional benefits for an additional premium were not considered.

All analysis assumes the accuracy of the underlying government data. While every effort was made towards a comprehensive collection of plans, HealthPocket makes no representation that every plan within the individual insurance market or in an individual state was included in this study. Statistics are not weighted by plan enrollment or application volume. Percentages are rounded according to standard industry practices.

HEALTHPOCKET

HealthPocket.com is a free website that compares and ranks all health plans available to an individual, family or small business, so everyone can make their best health plan decision and save on their out of pocket costs. The Company uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering online access to health insurance information and knew they could offer something different that can positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.

AUTHOR

This study was completed by Kev Coleman, Head of Research & Data at HealthPocket.com. Correspondence regarding this study can be directed to Mr. Coleman at kevin.coleman@healthpocket.com.

Feedback and questions are welcome but, given the volume of email, personal responses may not be feasible.

Sources:

¹ The government lists 10 Essential Health Benefit Categories. During our analysis, we separated the mental health services and substance use disorder services category into two separate categories in order to provide a more detailed analysis of these benefits.
² Part of the reason for this situation was due to the fact that an individual Essential Health Benefit may have one or more features. For example, when evaluating plans on the Essential Health Benefit "Drug coverage" we looked for coverage of several categories of medications: generic drugs, brand name drugs, and specialty drugs. We found that within a single Essential Health Benefit, some features may be satisfied by a plan while others may not. When we relaxed our criteria and looked for plans that satisfied more than 50% of the features within each benefit category, we found that less than 2% of current health plans are generally aligned with ACA standards.
³ See the InfoStat Methodology section to review what plan attributes were examined in each Essential Health benefit category.
⁴ This benefit is typically grouped with mental health services. For the purposes of this study, it was separated out discretely.
⁵ Rehabilitation services include treatment to relearn a skill that had been impaired or lost due to a medical condition such as learning to walk after suffering a stroke. Habilitative services involve treatment to learn a new skill such as a speaking without a speech impediment.
⁶ http://cciio.cms.gov/resources/factsheets/ehb-2-20-2013.html
⁷ Skopec, Laura et al. "Essential Health Benefits: Comparing Benefits in Small Group Products and State and Federal Employee Plans." Assistant Secretary for Planning and Evaluation. U.S. Department of Health and Human Services. December 2011. http://aspe.hhs.gov/health/reports/2011/marketcomparison/rb.shtml