The essential health benefit: Will essential become minimal?


Issue Date: Online Exclusive
Online Exclusive

The essential health benefit: Will essential become minimal?
“Nearsighted” IOM recommendations fail to consider long-term value of behavioral health benefits
by Ron Manderscheid, PhD

While every element of health reform in the United States is important to the future of mental health and substance use treatment, several of these interrelated elements are absolutely critical, including the Medicaid expansion and State Health Insurance Exchanges (HIEs), the Essential Health Benefit (EHB), and Accountable Care Organizations (ACOs).

Here is why: the Medicaid expansion and the HIEs will generate the financial resources for needed care; the EHB will define the floor benefit for the care to be provided; and ACOs will serve as the organizational engines through which higher quality, lower cost care delivery will take place.

For now, let’s focus on the Essential Health Benefit. The Affordable Care Act (ACA) is very clear that:
  • The EHB will specify the floor benefit to be offered to new enrollees through Medicaid (all adults up to 134 percent of the Federal Poverty Level (FPL) and through the insurance plans offered by the state HIEs (adults 135 percent FPL and higher).
  • The Secretary of the Department of Health and Human Services (HHS) is to define this EHB.
  • The EHB is to encompass 10 “essential benefits” including benefits for mental health care and substance use care which must be offered at parity with medical care benefits.

To begin this work, HHS issued a contract to the Institute of Medicine (IOM), a unit of the National Academies of Science, to outline the framework and considerations necessary to define the EHB. The IOM has now issued its final report (available here). As the IOM recommended, HHS has begun holding listening sessions to receive input from consumers, providers, and small businesses on the scope of benefits that should be encompassed in the EHB.

Here’s where the issue gets more complicated. In defining the EHB, HHS must consider tradeoffs between affordability and comprehensiveness. The ACA offers some guidance on this issue, saying that the EHB is to be based on what is offered in private sector plans. The IOM went further still, recommending that the EHB be based on the average cost of current plans offered by small businesses.

This recommendation is a problem: Current small business insurance plans frequently do not include mental health and substance use care benefits, and most are not operated at parity because they are not required to do so under the Wellstone-Domenici Act of 2008.

Hence, our response to the IOM report must be clarion: Health plans offered by small businesses cannot be accurate reference points for the mental health and substance use components of the EHB. Instead, large private plans could serve as a much more accurate reference point.

IOM also expressed considerable concern that the EHB be affordable. While affordability can be defined in different ways, the IOM chose to define it in terms of the cost of the insurance policy. To be frank, this is very nearsighted. The true costs of health insurance coverage must also encompass the very real costs that occur if needed care is not covered and therefore not provided.

For example, in the case of an EHB that fails to include mental health and substance use treatment, these costs would include those incurred as individuals suffering from mental health and substance use problems sought help in emergency rooms, got arrested and went to jails or prisons, or required other social or behavioral health services.

Another important consideration is balance. The ACA requires that the EHB have balance among different benefits. To those in behavioral health fields, balance means two kinds of parity: parity between medical care and mental health care benefits and parity between medical care and substance use care benefits. To settle for anything less would only continue the disparities that behavioral health fields have suffered for generations. Parity also makes economic sense, because good mental health care and good substance use care can and do reduce medical care expenses.

As the development of the EHB discussion unfolds within HHS, it is essential that the voices of behavioral health be heard on the importance of two things: strong mental health and substance use care benefits in the EHB, both of which must be at parity with medical care benefits.

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