What might happen to the “essential health benefits” the Affordable Care Act currently requires insurers to cover if the law is repealed and replaced? Things like maternity benefits, prescription drugs, preventive services and chronic disease management.
Here & Now‘s Robin Young talks with Sarah Kliff (@sarahkliff), who covers health policy for Vox, about the current benefits that are mandated under Obamacare, and whether more “a la carte” health insurance could work.
On the workings of insurance and the difficulties of an “a la carte” system
“Insurance wouldn’t really work if all of us could say, ‘I want coverage for my particular disease, but I don’t want to pay for the other things.’ The way health insurance works is you’re kind of spreading the cost of all of our health care, all of our very different needs, across a large group of people. And that’s essentially what is going on with maternity care in the individual market right now that everyone is required to purchase it as [the congressman] was suggesting. If you didn’t have the requirement, it would be very hard to get maternity services if you were someone who needed them. The National Women’s Law Center found that before Obamacare, just 12 percent of plans on the individual market would cover maternity care. It’s a big policy debate. Having insurers required to cover maternity care does raise premiums a little bit for everybody. But saying that it’s OK not to cover it means that women who do use the individual market and who do want to get pregnant, they’re going to have to pay a very steep fee to get insurance that would cover their pregnancy.”
On what else insurance companies are required to provide under Obamacare
“We also have in there — there’s a few things that weren’t frequently covered in the individual market before Obamacare. Mental health services, for example, or rehabilitated services, long-term care, are in that package. And that package has really been a sticking point in the debate about Obamacare repeal and replace. The drafters of Obamacare wanted to standardize health insurance. They wanted it to be that when you go into the market and you buy this product, you knew what you were getting. Before the Affordable Care Act, there wasn’t a lot of standardization in the individual market. It could be really hard to tell and you’d have to go through a lot of fine print to find out what your benefits actually covered. So, Obamacare standardized it, said every insurance plan has to offer these benefits. That drives up the cost of insurance. When you make health insurance more robust, the premiums get more expensive because the insurance plan is paying for more services. So there’s a constant trade-off there about what you require and what you want to ask people to pay for in premiums.”
On how Republicans are planning to change mandates
“Republicans would like to end this essential health benefit package. Every proposal I saw in the lead up to the American Health Care Act, their new replacement bill, said the essential health benefits go. Insurers, you get to decide what is covered. The challenge is they are trying to use this kind of arcane Senate process called reconciliation to pass their bill. It is a good process for Republicans because they only need a simple majority in the Senate, they don’t have to get to the 60 member filibuster-proof majority. But it is also a bad method because everything they do has to relate directly to the federal budget, and it would be very hard to make the argument that re-regulating the insurance industry is somehow a budgetary action. When we saw the American Health Care Act come out, it was actually a bit surprising. They said, ‘You know what, we’re not going to re-regulate the essential health benefits through this bill. We don’t think we have the authority to do that.’ What you might see is some regulatory action from Health and Human Services Secretary Tom Price, Medicare administrator Seema Verma, that they might do a few things to lessen the essential health benefits through the different regulations they put out. It’s not entirely clear how they would do that. Those 10 categories we were talking about — they are written into law. They are part of the Affordable Care Act. So that makes it a little harder to tackle this in a regulatory way. But one required benefit that you could tackle through regulations is the birth control mandate. There’s no language in the Affordable Care Act that says all insurers have to cover birth control without co-pay. That was completely done through regulations of the Obama administration. So, that’s a mandate they could tackle very easily and without any help from Congress.”
On whether higher premiums allowed for lower costs elsewhere
“That’s really tricky to measure. It’s a great point about when you invest in these preventative services that range from rehabilitative services, prenatal care, that you can see dividends elsewhere. But it can be really hard to measure, and it usually doesn’t get paid back to the insurance company. This is one reason — we all talk about prevention saving money, but often those savings are so far down the line that it doesn’t actually recoup to the person who has paid for the preventative care upfront. But I think prenatal care is a good example of this. If you’re having healthier pregnancies, it’s pretty reasonable to assume you’re going to have better outcomes and maybe cheaper care for that baby when it’s born. It’s really difficult to measure. There is a little bit of research on the birth control mandate, for example, that suggests that does save money. When more people are preventing pregnancies, when they’re taking contraceptives regularly — insurance premiums, there’s decent research suggesting they’ll go down because you’ll have less unintended pregnancies. But it’s a tricky area to measure.”
On the idea of buying just the insurance customers want
“It’s a little bit similar. It is a very different theory of insurance, that you should be able to pick and choose the benefits. And it’s a little hard to see how that works because one of the ideas of packaging all these benefits together is that some people will want to use them, some people won’t. When everyone gets to pick their benefits, the premiums are going to be high because you can assume all the people with knee problems are choosing the knee plan.”
This conversation is part of a weeklong series on health insurance and the American Health Care Act, the Republican plan to repeal and replace the Affordable Care Act. You can find links to the rest of our stories below.