The Republican “Replace” plans make a big blather about reducing the scope of essential health benefits in order to dramatically lower premiums for healthy individuals. Let’s take a look at what is an Essential Health Benefit (EHB) and then do some analysis from there:
(1)In generalSubject to paragraph (2), the Secretary shall define the essential health benefits, except that such benefits shall include at least the following general categories and the items and services covered within the categories:
(J)Pediatric services, including oral and vision care.
The vast majority of the spending is on a combination of Hospitalization (C), Prescription Drugs (F) Ambulatory Patient Services (A) and Chronic Disease Management (I). Ambulatory patient services are sick visits to physicians. If those things are core services that need to be covered then it makes perfect sense that lab services (H) are covered as that fuels decision making and improves care. Well visits are fairly cheap as the screenings tend to be both fairly low cost and infrequent. At this point, Emergency Services (B) and Maternity/Newborn care (D) are the big money areas that could be cut from the essential benefits definition. However we run into the EMTALA problem that emergency services must be provided to the point of stabilization without regard to the patients’ ability to pay. Someone will pay.
Mental Health and substance abuse treatment services is the next “logical” spot to cut back as these run into the argument that mental health is a personal problem and not a disease (although that attitude is thankfully fading). But some money could be carved out of premiums. It might be a 5% savings on average with higher savings in regions that are getting hit hard by the opioid crisis. The trade-off is more dead people.
Finally, section J is vulnerable. Pediatric dental and vision are seen as add-ons. There is a good evidence base that kids who have good teeth and can see the chalkboard are better off than kids whose teeth hurt and can’t see if it is an “O” or a “U” on the board. The problem from a premium savings point of view is that there is almost no money here. Kids, once they can wipe their own butt, are dirt cheap to cover. Carving out pediatric dental/vision out of a risk pool that has relatively few kids makes the savings under $1 per member per month.
Realistically, the only way to have insurers spend significantly less money on essential health benefits is to institute usage limits. We do that to some degree with Rehabilitative services. It is not uncommon for states to decide that 25 or 30 Physical Therapy Visits at normal cost sharing is the essential service. Restricting covered days in the hospital like Medicare does would reduce insurance company spending and thus lower premiums. Restricting the number of brand name scrips or the number and type of diagnostic and labortory tests would also lower utilization and insurance company spending. But unless there are some standards we get a race to the bottom where healthy people get very weak insurance which is fine as long as nothing goes wrong and very sick people get comprehensive insurance that they can not afford because the subsidies being batted around are too damn small.
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