May 15, 2017

An Introduction to Essential Health Benefits

If you pay attention to current events (or even if you don’t), you likely know that Republican leaders in the House of Representatives, with the support of President Trump, are trying to repeal and replace the Affordable Care Act, which was put in place by then-President Obama in 2014. If you’re confused by the ACA and its aspects, you’re not alone. It’s complicated and dense, but in essence, its goal is to improve the affordability and quality of healthcare. This is to counteract actions taken in the 1990’s when Congress created a tax credit to help low-income families afford healthcare. While this did lower costs, it also allowed health insurers to sell cheap products by limiting services, which left many in need without options.* Striving for a better choice, Democratic leaders, with the support of then-President Obama, produced the ACA, which guarantees that all health insurers include certain services, or essential health benefits, that act as a standard in order to ensure quality. These are divided into 10 categories, some of which are controversial, for reasons we’ll explore later.
  • Ambulatory patient services or Outpatient care
  • Emergency services
  • Hospitalization or Inpatient care
  • Maternity and newborn care
  • Mental health services and addiction treatment
  • Prescription drugs
  • Rehabilitative and devices
  • Laboratory services
  • Preventative and wellness services
  • Pediatric services**
Consumer costs are divided into 4 “metal tiers” – bronze, silver, gold and platinum. Each designates a certain percentage of healthcare coverage, as well as general rules about monthly and out-of-pocket costs. For example, bronze plans cover about 60% of costs, leaving the consumer to pay the remaining 40% in the form of copays and deductibles. Platinum plans cover about 90%, leaving the consumer to pay about 10%. A more detailed breakdown can be found here. To Democratic leaders, this was a win/win because it satisfied the need for options without excluding necessary services that many consumers needed. Plus, the ACA lowered overall costs by “providing insurance for millions and making preventative care free.” This is amidst a host of other, more technical benefits, which can be found here. However, the Affordable Care Act also comes with its own issues. The most common criticism is that it has actually increased costs and grants fewer choices to consumers who want a more limited plan. Some argue that the ACA is too all-inclusive, because it forces people to pay, in part, for benefits they don’t need. For example, a man, who can’t physically bear children, might feel it’s unfair to pay for maternity and newborn care, as the ACA requires, since he’ll never actually use such benefits.**** Republican leaders hope that removing certain benefits, particularly those that don’t apply to the entire population, such as maternity and newborn care, mental health services and addiction treatment, and prescription drugs, will improve access to the market. Hence, more choices will be offered to consumers, and costs will be cut.*** But, since Republican leaders haven’t yet garnered enough support to make this happen, it’s difficult to anticipate exactly what changes will be made to the ACA and, consequently, what the big-picture outcomes will be. Further specifics will be announced as the House of Representatives continues to hash out this issue. For now, it’s important that the average American stay aware and up-to-date on these events, which will not only affect modern healthcare, but also each and every one of us. Hopefully, this helped you untangle the knots of this subject and begin to weigh the advantages and disadvantages for yourself as you consider the proposed changes. If you feel strongly inclined one way or the other, we encourage you to reach out to your State Representatives and Senators and voice your opinions. After all, they’re there to represent you! Be sure to check back next month for our latest post, sign up for the WISE newsletter, attend a WISE meeting to get more involved, or visit our website at   Thanks, Lucy, and the WISE team * ( ** ( ***(