During recent weeks, you have probably heard the term Essential Health Benefits repeatedly as Congress continue efforts to repeal and replace the Affordable Care Act (ACA). Right now, the Senate GOP leadership is cooking up their version of a health care bill behind closed doors and could take a vote before the July 4th recess.
The House-passed GOP plan eliminates Medicaid expansion and dramatically cuts Medicaid funding. Congress is also considering measures to allow states to waive the essential health benefit rules within the ACA. What are “Essential Health Benefits” and why have they become so central in the debate around health insurance coverage in America?
Essential Health Benefits (EHBs), also called federal minimum benefit standards, are at heart of the ACA. EHBs outline a set of ten categories of services that health insurance plans must cover at minimum. States must also provide EHB to beneficiaries eligible under the ACA’s Medicaid expansion, and plans may offer additional benefits such as dental and vision coverage.
Prior to the ACA, it was up to each respective state to determine what benefits (called insurance mandates) had to be included in insurance plans. Not surprisingly, states differed widely in terms comprehensiveness required, and no specific benefit was deemed essential in all 50 states and Washington, D.C.
EHBs provide coverage that offers viable protection against some of the most basic health care costs Americans experience and were designed to provide marketplace consumers with insurance coverage similar to the coverage of employer-sponsored insurance and Medicaid.
So, every health plan must cover the following services1:
Before the ACA, most health insurance frequently did not cover these basic services. For example, in 2011, among people in the individual market:
Under the GOP’s replacement plan, comprehensive insurance, with benefits like maternity or mental-health coverage, could become unaffordable—if not unavailable.
If the Essential Health Benefit standards were eliminated, individual and small-group market plans would quickly revert to the pre-ACA status quo and would likely:
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