Initial Thoughts on Essential Health Benefits

Source: Amy Monahan, New York University Review of Employee Benefits & Executive Compensation, Forthcoming

From the abstract:
This symposium essay takes an initial look at the concept of “essential health benefits,” a critical yet often-overlooked part of the Patient Protection and Affordable Care Act (“PPACA”). For the first time, through the requirement that all individual and small group health insurance policies cover “essential health benefits,” the federal government will take an active role in regulating the substance of health insurance. PPACA does not define “essential health benefits” by statute, but instead grants authority to the Secretary of Health & Human Services to determine which benefits must be provided. Unfortunately, the statutory language provides very little guidance regarding how to meaningfully distinguish between services that ought to be considered essential and those that ought not. Most troubling is the fact that the statute gives the Secretary no concrete basis on which to exclude benefits from the definition of essential. To further complicate matters, the Secretary’s decisions will come with significant fiscal implications for the federal government given the relationship between premiums and the cost of the newly-created premium tax credits. And while PPACA claims to retain a role for the states in regulating the substance of health insurance, this essay suggests that this power is largely illusory.

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