IOM urges HHS to create a list of affordable essential health benefits

The Institute of Medicine has released its recommendations to the U.S. Department of Health and Human Services, urging HHS to create an essential health benefits package (EHB) that provides needed healthcare coverage, but keeps an eye on affordability.

"But before we forward a proposal, it is critical that we hear from the American people," said HHS Secretary Kathleen Sebelius in the statement reacting to the report. "To accomplish this goal, HHS will initiate a series of listening sessions where Americans from across the country will have the chance to share their thoughts on these issues."
 
The report from IOM comes in response to a request from HHS officials about what process the agency should use to determine the menu of essential health benefits, which will comprise the bare minimum requirements health plans must meet in terms for benefits in order to participate in the state health insurance exchanges set to launch in 2014.

"The charge of the committee specifically was not to decide what is covered in the EHB but rather to propose a set of criteria and methods that should be used in deciding what benefits are most important for coverage," the report noted.

In making its recommendation, the IOM committee suggested HHS take an approach to creating the EHB packages analogous to going grocery shopping with a strict budget in mind. Keeping the costs of what is included in the EHB list is crucial, they noted, and would allow HHS to strive toward a "premium target" that would keep the cost of the coverage in check.

"Keeping the EHB affordable is necessary for consumers, employers and taxpayers," it noted.

In order to accomplish this, IOM suggested that HSS look to provide a framework for determining an EHB package that would:

• consider the population's health needs as a whole;
• encourage better care by ensuring good science is used to inform practice decisions;
• emphasize the judicious use of resources; and
• carefully use economic tools to improve value and performance.

America's Health Insurance Plans, the association that represents health insurers praised the work of the IOM.

"With this thoughtful report, the IOM is urging policymakers to strike a balance between the affordability of coverage and the comprehensiveness of coverage," said Karen Ignagni, AHIP president and CEO, said in a prepared statement. "We agree that this balance is critical to ensuring that individuals, working families and small employers can afford health insurance. The recommendation that the initial EHB package reflect the scope of benefits and design provided under a typical small employer plan is an important step toward maintaining affordability."

In the process of making its recommendations, the IOM committee was firmly focused on finding the balance between providing the healthcare that would be of most benefit to the anticipated 68 million people who will be buying their health coverage through the exchanges, while also making that care affordable.