States Select Benchmark Plans

small_essential_health_benefits.pngAs we discussed in our "What are Essential Health Benefits" blog, the Affordable Care Act requires states to determine a minimum level of coverage for all health insurance plans offered through health insurance exchanges and the private marketplace starting in 2014. This coverage requirement is called the essential health benefit and it includes ten categories of coverage. The Department of Health and Human Services (HHS) issued guidance earlier this year that gave states the flexibility to choose essential health benefits by identifying a benchmark plan for the state. Benchmark plans are based on existing insurance coverage options in the state and will define the basic coverage requirement for any health insurance plan. HHS recommended that every state pick a benchmark plan by September 30th.

As of October 10th, 25 states including the District of Columbia, have selected a benchmark plan with many choosing a small employer plan as the benchmark. The Health Affairs Blog has compiled a great summary of what each state has done so far to establish their essential health benefit. You can browse their chart here.

It's important to note that defining essential health benefits is separate from creating a state health insurance exchange. Essential health benefits will define minimum insurance coverage in both insurance plans offered through an exchange, but also health insurance plans offered in the private market. While many states have chosen not to move forward in establishing their own health insurance exchange as required under the Affordable Care Act, it's expected that a large majority of states will define their own essential health benefits.

We'll continue to watch as states make decisions on essential health benefits and keep you updated on the progress. Keep in mind, how states define essential health benefits can have a great impact on the coverage and care patients receive.