10 Essential Health Benefits Under the ACA
Before the Affordable Care Act (ACA, also known as Obamacare) took effect, the scope of coverage offered by health insurance plans varied considerably from one state to another. Consumer protections amounted to a patchwork of state-based regulations that were robust in some states and minimal in others.
State requirements that are more comprehensive than the ACA still apply, but in every state, the ACA has established minimum standards. Essential Health Benefits (EHBs) are ten types of medical care that must be covered—with no dollar limits on annual or lifetime benefits—on all individual and small group plans with effective dates of January 2014 or later. EHBs are covered regardless of whether the plan is sold through the exchange or off-exchange.
Grandmothered and grandfathered plans are still in existence, but they had effective dates prior to 2014. So EHB requirements do not apply to grandmothered and grandfathered plans, with the exception of preventive care, which is required to be covered on grandmothered—but not grandfathered—plans. EHB requirements also do not apply to large group plans.
Here’s what the EHBs are, and how they work.
Ambulatory Services
This includes visits to doctors offices and clinics, as well as hospital care provided on an outpatient basis.
Chronic Disease Management, Wellness Care, and Preventive Services
Preventive care is covered with no cost-sharing for the patient (ie, the insurance company pays the full cost), but only if the preventive service in question is on the list of covered preventive care.
There are three agencies whose recommendations are used to create the list of covered preventive care. The list is developed primarily based on services that receive an “A” or “B” rating from the U.S. Preventive Services Task Force (USPSTF). Breast cancer screening for women aged 40 to 49 only has a “C” rating from the USPSTF, but an exception was made to include it in the list of covered preventive services under the ACA.
In addition to USPSTF guidelines, the CDC’s Advisory Committee on Immunization Practices (ACIP) provides vaccine recommendations, and the Health Resources and Services Administration (HRSA) provides additional recommendations for preventive care for women, infants, and children.
Contraception is covered under preventive care, which means it’s available at no cost to the insured. But health insurance plans are only required to cover at least one version of each of the FDA-approved types of female contraceptives.
Emergency Services
Although health insurance carriers can limit most coverage to in-network providers, that’s not true for emergency services.
Your health insurer cannot impose higher cost-sharing for out-of-network hospital emergency room care and must allow you to go to the closest emergency room, even if it’s not in your plan’s network.
The requirement that health insurers cover emergency treatment also extends to ambulance transport, including air ambulance.
It’s important to note, however, that balance billing can still be an issue in emergency situations when out-of-network emergency rooms and/or ambulance services are used. Although the ACA requires carriers to cover emergency treatment at in-network levels even if the hospital or ambulance provider is out-of-network, that doesn’t obligate the hospital, emergency physicians, or ambulance company from billing the patient for the balance of their bill, above whatever is paid by the patient’s insurance company.
Some states have banned balance billing in emergency situations, and similar legislation has been considered—but not yet passed—at the federal level.
Hospitalization
This includes the full range of inpatient care, including treatment by doctors and nurses, inpatient lab and pharmacy services, and surgical care.
Laboratory Services
Lab work that falls under the scope of the preventive care described above is covered with no cost-sharing for the patient.
Other necessary lab work is covered under the plan’s normal cost-sharing guidelines.
Maternity and Newborn Care
This includes all maternity, delivery, and newborn care, although prenatal checkups are generally covered under preventive care (described above) and may be covered with no cost-sharing for the expectant mother. According to HRSA, prenatal care falls under the category of well-woman care. And although in most cases that’s covered once per year, the agency notes that in some cases “several visits may be needed to obtain all necessary preventive services.”
In addition to the checkups themselves, there are some specific tests (for gestational diabetes, Hepatitis B, and Rh Incompatibility) that are covered for pregnant women under the category of preventive care, with no cost-sharing.
Mental Health and Substance Abuse Treatment
This includes inpatient and outpatient treatment for mental health and substance abuse treatment.
Mental health parity requirements predate the ACA, although the ACA expanded the parity law to apply to individual market plans as well as employer-sponsored coverage. Under the parity requirement, a health plan cannot have more restrictive coverage limits for mental health treatment than it has for medical/surgical treatment.
Pediatric Services, Including Dental and Vision Care for Children
Unlike the other EHBs, pediatric dental does not have to be included in health insurance plans in most states. Instead, the exchange can simply offer stand-alone pediatric dental plans for sale.
If exchanges sell stand-alone pediatric dental plans and a family purchases a health plan plus the separate pediatric dental plan, only the cost of the health plan is counted when their premium subsidy is calculated. That could change, however, under a proposed rule issued by the IRS in July 2016. Under the proposed rule, the cost of pediatric dental coverage would be included in premium subsidy calculations, even if the dental coverage is sold through the exchange as a separate policy, rather than an embedded part of the health plan.
There’s no requirement that health plans cover dental or vision for adults.
Prescription Drugs
Individual and small group plans must cover prescription drugs, and their formularies must include at least one drug in every United States Pharmacopeia (USP) category and class (or more, if the state’s benchmark plan includes more).
Formularies are also developed with input from pharmacy and therapeutics (P&T) committees, but they can vary considerably from one health insurer to another.
Under the preventive care guidelines described above, health plans must cover—at no cost to the insured—at least one version of every type of FDA-approved female contraceptive.
For other drugs, the plan’s cost-sharing rules apply, and plans can require step therapy (a requirement that the insured start with the most cost-effective and least-risky drugs to see if they work, before trying more expensive, riskier medications).
Most health insurers place covered drugs in tiers, ranging from one to four. Tier one drugs have the lowest out-of-pocket costs, and Tier four drugs (or specialty drugs) have the highest out-of-pocket costs.
Rehabilitative and Habilitative Services
This includes both therapy and devices needed for rehabilitation and habilitation.
Rehabilitative services focus on regaining lost abilities, such as occupational or physical therapy following an accident or stroke.
Habilitative services provide assistance with gaining skills in the first place, such as speech or occupational therapy for a child who isn’t talking or walking according to expectations.
Limits on the number of visits per year typically apply (although plans cannot impose dollar limits on EHBs, visit limits are allowed). In some states, the limit applies to the combination of physical therapy, occupational therapy, and speech therapy, while others have separate limits for each type of therapy.
Article Sources
- Center for Consumer Information and Insurance Oversight, Mental Health Parity and Addiction Equity Act.
- Centers for Disease Control and Prevention, Advisory Committee on Immunization Practices (ACIP).
- U.S. Department of Health and Human Services, Health Resources and Services Administration.
- U.S. Department of Health and Human Services, Health Resources and Services Administration, Women’s Preventive Services Guidelines.
- U.S. Preventive Services Task Force, USPSTF A and B Recommendations.