10 Essential Health Benefits in Health Plan Design

The ten Essential Health Benefits (EHBs) listed by CMS are: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. In practice, government omitted some of these essential health care benefits in its own plans, and it has neglected to include other essential health benefits in its official list.

Some are treating the 10 EHBs as the ten commandments of health care plan design. The relevance of each benefit is not in universal agreement because relevance of a benefit varies with each consumer’s risk tolerance and situation. For many of us there is little or no foreseeable personal need for maternity and newborn care, mental health and substance abuse treatment, and prescription drug coverage. Furthermore, despite the clear importance of both long-term care and dental care as health benefits, they are omitted from the 10 EHBs.

Although we may not feel the personal need for each of the 10 EHBs that does not mean we want to deprive others from any benefits. Most of us have enough altruism to support offering basic elements of those benefits to others in our community.

The sanctimonious arguments from the Hill about why the big 10 must be mandatory are at odds with both government’s actual practice and taxpaying tolerance of ordinary consumers. For example, the government Medicare program does not force consumers to pay for drug coverage. Part D Medicare drug coverage is available, but not mandatory. The government’s Medicaid plan provides drug coverage as part of the program and the drug coverage costs $57 billion per year before pharmaceutical manufacturer rebates (rebates are more than $20 billion). Medicare escaped without mandated drug coverage for a compelling practical reason – drugs can be very expensive, especially if there is no heavy discounting.

Long term care is another benefit needed by most elderly. “Among people age 65 and over, an estimated 70 percent will use [long term care].” In addition to the aged, there are many disabled Americans who need supported living accommodations and medical vigilance. Medicare does not pay for long term care except in a few limited circumstances. Many municipalities used to offer retirement home care, but few can afford it now. On the other hand Medicaid admits that it pays $158 billion per year for more than half of the nation’s long term care. Even retirees who start out paying for their own long term care frequently deplete their total savings, pushing them into Medicaid eligibility and its long term care benefit.

Medicaid tries to provide good, but less costly long term care by encouraging patients to use community or in-home care ($17,200 per person per year) instead of the hyper-expensive institutional care, at $91,000 per year for nursing facility care.

Since half of the over 65-year-old population have scant savings and earn less than $24,000 per year they will be unable to pay for even a few months of long term care. Long term care is not something frivolous or optional. It is a category of care needed by a large portion of the population who cannot afford it. The federal government regards as a necessity for Medicaid beneficiaries. Yet long term care is omitted from the list of official “Essential Health Benefits.” Medicare omits the benefit for a pragmatic reason — long term care can be very expensive.

Dental care is important yet it is also omitted from the government’s official 10 EHBs. Medicaid covers dental care for children, but not for adults. Medicare does not mandate dental care, although supplemental policies are available. The Affordable Care Act (ACA) does not mandate that its Marketplace plans include dental care. Some Marketplace plans may include dental coverage but only when purchased as part of a plan that covers the other 10 EHBs. Some conventional private-paid and employer-paid health plans include dental care, often with large out-of-pocket charges. In all plans except for children under Medicaid, government treats dental care as optional.

The credibility of 10 EHBs as health policy bedrock is undermined by the government’s own practices. Drug coverage is not a mandatory component in Medicare or private-paid and employer-plans but it is in Medicaid and Affordable Care Act (ACA)’s Marketplace plans. Long term care is mandatory in Medicaid, but not in Medicare, ACA’s Marketplace plans, or private and employer-paid plans. Dental coverage is mandatory for children in Medicaid, but not for enrollees in adult Medicaid, or in Medicare or ACA’s Marketplace plans, or private and employer-paid plans.

Alignment with the 10 EHBs should not be an automatic requirement. Pontificating about moral obligations to offer the 10 EHBs is fine, but the public deserves a credible and detailed plan of who pays and how much is paid to defray the cost of each of the 10 EHBs. Some of the benefits are used by few and some benefits are far more important than others.

Consideration should be given to a health plan design that allows for selection of some benefits. We would achieve a higher degree of acceptance if the obligation called for including at least 9 of the 12 essential benefits in our personal health care plan. (The twelve benefits are the 10 EHBs plus Long Term care and Dental Care). Government plans have ignored the EHBs for financial convenience. Consumers deserve no less freedom.

The selection and enforcement of rules also matters. There would be considerably less opposition to accepting and updating the 10 EHBs for future health plans if sensible limits are placed on use. For example, a patient with ambulatory care coverage should be dissuaded (by a hefty charge) from using emergency room services for a service routinely handled in a primary care doctor’s office. Since the cost of some drugs and treatments exceeds a decade worth of many families’ earnings, vigorous negotiation of wholesale pharmaceutical prices is needed. Retail prices of drugs should not exceed price levels the manufacturer sets for the rest of the world. Elective treatments should be entirely patient-paid. We need to have a conversation about choosing between the broader needs of the public and million dollar treatments. Only in a world without financial constraints can we ignore costs.

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