Half of states have chosen benchmark insurance plan: report

A little more than six months before open enrollment begins, 24 states and Washington, D.C., have chosen a benchmark plan that will determine what health insurers must cover in health plans sold in the state exchanges and individual and small-group markets, according to a new study from the Commonwealth Fund.

In the rest of the country, the snapshot suggests, the federal government will model the minimum benefits on the largest small-group plan sold in the state.

Under the Patient Protection and Affordable Care Act, individual and small-group plans must offer an “essential health benefits” package. The core set of benefits must cover 10 broad categories, such as emergency services, maternity and pediatric care, prescription drugs, and mental health and substance-abuse services. HHS issued a final rule in February on essential benefits for 2014 and 2015 and will revisit the provisions for the 2016 benefit year.

For the study, Sabrina Corlette, research professor at Georgetown University's Health Policy Institute worked with colleagues to analyze the progress states have made in choosing their benchmark plans between January and October 2012. They found that 19 states chose existing small-group plans, or the typical employer-based plans for businesses with fewer than 50 employees. The other five states opted for HMO or state employee benefit plans.

"For states that did not select a benchmark plan, the federal government will designate the largest small-group plan in the state as the benchmark, meaning that the majority of states will have the most widely purchased small-group plan in the state as the basis of their essential health benefit," according to an announcement about the study. "Selecting existing small-group market plans, which are similar to what many consumers already have, will likely mean a smoother transition into the new marketplaces and an easier adjustment to the new rules."

As part of their research, the study's authors also investigated how 10 states decided on their benchmark plan. They found that states had conducted analyses of plan enrollment and costs, and also involved consumer and patient groups, insurers, and specialty physicians in the process.

“State officials are now turning to implementation of the essential health benefits requirements,” Corlette said in an announcement about the study's findings. "Several officials noted that they would likely need to enact state legislation to ensure their departments of insurance will have the authority to enforce these new benefit standards for consumers.”

Karen Ignagni, president and CEO of the trade group America's Health Insurance Plans, has said the industry appreciates the flexibility the Obama administration afforded states in establishing the minimum benefits. In a statement after HHS issued the final regulations last month, however, Ignagni reiterated AHIP's position that the minimum standard “will still require many individuals and small businesses to purchase coverage that is more comprehensive and more expensive than they choose to purchase today.”