The 2010 Affordable Care Act set forth the following ten categories of essential health benefits, at Section 1302 of the ACA, codified at 42 U.S.C. § 18022: Health insurance plans must cover these benefits i.e. they must cap people's out-of-pocket spending and must not limit annual and lifetime coverage.
Mandatory for certain health insurances
The 2010 Affordable Care Act defines benefits which Individually purchased health insurance in the United States and insurance plans in small group markets, both inside and outside of the Health Insurance Marketplace must cover for people. Exempt from the EHB requirement are large-group health plans, self-insured ERISA plans, and ERISA-governed multiemployer welfare arrangements not subject to state insurance law.
Interpretation
The essential health benefits are a minimum federal standard and "states may require that qualified health plans sold in state health insurance exchanges also cover state-mandated benefits." The act gives "considerable discretion" to the Secretary of Health and Human Services to determine, through regulation, what specific services within these classes are essential. However, the Act provides certain parameters for the secretary to consider. The secretary must "ensure that such essential health benefits reflect an appropriate balance among the categories... so that benefits are not unduly weighted toward any category"; may "not make coverage decisions, determine reimbursement rates, establish incentive programs, or design benefits in ways that discriminate against individuals because of their age, disability, or expected length of life"; must take into account "the health care needs of diverse segments of the population, including women, children, persons with disabilities, and other groups"; and must ensure that essential benefits "not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or the individuals' present or predicted disability, degree of medical dependency, or quality of life." According to a Commonwealth Fund report in 2011:
Law history
Coverage of essential health benefits was first required by the 2010 Patient Protection and Affordable Care Act, which was a major piece of health care reform legislation. The EHB provisions of the ACA was an amendment to the Public Health Service Act. Lavarreda, director of health insurance studies for the UCLA Center for Health Policy Research, explained that before the ACA's passage, U.S. health insurance sector experienced "a race to the bottom, with insurers cutting benefits to lower premiums." The establishment of essential health benefits "set a standard for insurance. Anything below that is not true health insurance." The EHB requirement came into effect on January 1, 2014. Revision and repeal of essential health benefits coverage was proposed in the Republican part American Health Care Act of 2017. House Freedom Caucus members lobbied during legislation discussion with House SpeakerPaul Ryan to remove EHBs as a condition for approval of the AHCA bill.
Comparison with minimum essential coverage
Essential health benefits should not be confused with minimum essential coverage. MEC is the minimum amount of coverage that an individual must carry to meet the individual health insurance mandate, while EHBs are a set of benefits that qualified health plans must offer. MEC is a low threshold; many forms of coverage that do not provide essential health benefits are nevertheless considered minimum essential coverage.
