The Affordable Care Act and Essential Health Benefits

What are Essential Health Benefits?

Before the ACA, many health insurance companies tried to save money by limiting the services they would pay for. The ACA tries to change this with essential health benefits.

Essential health benefits, also called EHBs, are ten health care service categories that must be covered by most insurance plans. These essential health benefits are a standard for insurance companies. If an insurance plan does not cover all of the essential health benefits, it is not considered “good” insurance.

What are the Ten Essential Health Benefits?

The ten essential health benefits are:

  1. Ambulatory patient services
    Ambulatory patient services can also be called outpatient care. This is the most common type of health care. You usually go to a doctor’s office, get treatment, then leave. Most insurance plans already cover this. The ACA makes sure that the number of doctors covered by an insurance plan (sometimes called a network) is “sufficient.”

  2. Emergency services
    This is the type of care you get at a hospital emergency room. Many plans cover emergency services, but they sometimes need pre-approval from the insurance company. Under the ACA, pre-approval is not needed.

  3. Hospitalization
    According to the ACA, your insurance must cover your hospitalizations. However, the amount that your insurance pays and the amount that you pay depends on your deductible (the out-of-pocket amount that you are required to pay).

  4. Laboratory services
    Under the ACA, most insurance plans must cover screening tests. However, they are not required to cover diagnostic tests. Diagnostic tests are tests that doctors order when you have symptoms of a disease.

  5. Maternity and newborn care
    The ACA requires insurance plans to cover medical care for women during pregnancy and up to six weeks after having their baby. It also requires that insurance plans pay for childbirth and the newborn baby’s care.

  6. Mental health and substance use disorder services including behavioral health treatment
    The ACA requires that most insurance plans cover mental and behavioral health treatments. In some states, coverage may be limited to a certain number of therapy visits per year.

  7. Pediatric services including oral and vision care
    Before the ACA, very few insurance plans covered dental and vision services for children. Under the ACA, most insurance plans need to cover dental X-rays, teeth cleanings, eye exams, and glasses for children under 19.

  8. Prescription drugs
    Before the ACA, many insurance plans only covered prescription drugs as an option and at a higher cost to you. The ACA requires most insurance plans to cover at least one type of drug from every drug category.

  9. Preventive and wellness services
    Preventive and wellness services are medical services that you get before you are sick. These services try to prevent you from becoming sick in the first place. Immunizations and screenings are examples. The ACA requires most insurance plans to cover these services. A list of the preventive services can be found at: https://www.healthcare.gov/what-are-my-preventive-care-benefits/

  10. Rehabilitative and habilitative services and devices
    If you are injured or sick, rehabilitative services help you regain your ability to walk, talk, or work. Physical therapy is a type of rehabilitative service. Many insurance plans cover rehabilitative services. However, few plans cover habilitative services. These are therapies that help with long-term disabilities, like multiple sclerosis. The ACA requires that most plans cover both rehabilitative and habilitative services and devices.

Do All Insurances Have to Cover the Essential Health Benefits?

Beginning January 1, 2014, non-grandfathered plans and small group plans are required to cover the essential health benefits.

Grandfathered plans and large employer plans are not required to cover the essential health benefits. However, many of these plans cover most of the essential health benefits already. Also, many experts think that grandfathered plans and large employer plans that do not cover the essential health benefits will probably do so in the future (even though they are not required to). For more information about grandfathered health plans, click here.

Finally, insurance plans must cover the essential health benefits to be included in the Health Insurance Marketplace. The Health Insurance Marketplace is sometimes also called the Health Insurance Exchange. The Health Insurance Marketplace is a website where people can buy health insurance. Each state will have its own Marketplace. For more information about the Marketplace, click here.

Will the Essential Health Benefits be the Same in Every State?

The ACA requires most insurance plans to cover the essential health benefits. However, it does not tell the insurance plans how much they have to pay, or how many visits they have to pay for.

In 2011, each state figured out the details that the insurance plans would have to follow. This is called the benchmark plan. The benchmark plan represents the typical types of coverage for the essential health benefits. The benchmark plan is the standard that insurance companies must follow.

Each state has a slightly different benchmark plan. This means that the essential health benefits are covered differently in each state. Some states may require insurance plans to pay more for certain essential health benefits than others. For more information about the state benchmark plans, click here.

Where Can I Find More Information?

A short definition of essential health benefits by HealthCare.gov: https://www.healthcare.gov/glossary/essential-health-benefits/

A very nice article about the essential health benefits by the AARP: http://www.aarp.org/health/health-insurance/info-08-2013/affordable-care-act-health-benefits.html

A short summary about essential health benefits by Families USA: http://familiesusa.org/blog/10-essential-health-benefits-insurance-plans-must-cover-starting-in-2014

For technical information about the benchmark plans of each state, go to the Centers for Medicare and Medicaid Services: http://www.cms.gov/cciio/resources/data-resources/ehb.html