Working Together For Michigan Consumers To be Healthy

Letter on Essential Health Benefits Bulletin, Center for Consumer Information and Insurance Oversight

Secretary Kathleen Sebelius

U.S. Department of Health and Human Services

200 Independence Avenue, S.W.

Washington, D.C. 20201

Re: Essential Health Benefits Bulletin, Center for Consumer Information and Insurance Oversight (CCIIO)

Dear Secretary Sebelius:

Michigan Consumers for Healthcare (MCH) submits the following comments in response to the Health and Human Services’ (HHS) “Essential Health Benefits Bulletin” (“Bulletin”) issued December 16, 2011. MCH represents more than 110 community and health advocacy organizations in Michigan, and works collaboratively with a diverse alliance of consumers, partners and policymakers to attain affordable, accessible, quality healthcare for everyone in Michigan.

After careful review and consideration of the Bulletin, MCH believes that it provides too much flexibility to the states in the design of their Essential Health Benefits (“EHB”) standards by allowing them to benchmark to a “reference plan.” This approach relies too heavily on a palette of inadequate options that insurance companies already provide, and would allow states to create EHB packages that fall short of the robust, comprehensive coverage contemplated by the Affordable Care Act (“ACA”). Also troubling is the Bulletin’s suggestion that insurers will play a role in determining the scope of  “essential” benefits. This creates an unacceptable conflict of interest: naturally, insurers will be motivated to create EHB standards that favor their financial concerns. Under the Bulletin’s framework, consumers lose when their interests do not intersect with the insurance industry’s.

Additionally, the Bulletin relies heavily upon the work of the Institute of Medicine (IOM), which issued a report prioritizing cost considerations in the design of EHB standards and recommending the use of small employer plans as a guide in this process. Our coalition knows from experience that small employer plans generally offer significantly lower levels of coverage to those they insure, along with higher out-of-pocket costs that discourage utilization. While every consumer is potentially disadvantaged by this approach, we are particularly concerned about its impact on low-income and vulnerable populations that already suffer inadequate coverage through small employer plans, if they have access to them at all. Using this insufficient vehicle as a basis for expanding healthcare coverage to all will lead to less consumer choice and access, and potentially poorer quality of care. Paradoxically, an up-front emphasis on controlling costs in formulating EHB standards will not help control long-term healthcare spending; instead it will strip out or limit coverage for many services that improve health and well-being over the course of a lifetime, leading to higher costs in the long run.

MCH believes that it is desirable to provide states with flexibility to exceed a clear, minimum threshold of comprehensive coverage established at the federal level, but not to allow states to establish their own “floors” of coverage. Successful implementation of ACA depends on your office establishing a strong “floor” of consistent, basic coverage across the country. Indeed, the ACA explicitly grants and relies upon your office’s statutory authority to create EHB standards that provide an appropriate balance among benefit categories as well as take into account the health care needs of diverse/vulnerable populations, among the “elements for consideration” by the Secretary. It does not appear to provide for the delegation of this power to the states. Absent your direction and leadership, states will move to create unique EHB standards that are anything but consistent, undermining one of the key purposes of ACA: a uniform, adequate level of healthcare coverage for all Americans.

As you move forward, MCH urges you to consider the following recommendations:

1)     Require comprehensive coverage of all ten statutory categories of services, as provided by ACA, in an EHB package established by the Department of Health and Human Services (HHS), not delegated to the states.

2)     Allow state flexibility to build on the robust federal EHB package established by HHS to incorporate state mandates.

3)     Broadly include state benefit mandates, with particular attention to the needs of vulnerable populations covered by these mandates.

4)     Do not yield to insurance industry pressures in the determination of “essential” benefits.

5)     Minimize utilization management, especially with respect to preventative services that improve long-term health and well-being.

6)     Implement high standards for preventive services and children’s health to lower long-term healthcare costs.

7)     Require a transparent and inclusive process for developing EHB standards that are driven primarily by healthcare consumers.

The Affordable Care Act is an unprecedented opportunity for our nation to provide everyone with access to affordable, quality healthcare. However, we know that implementation of the ACA will only be successful if its implementation is consistently guided by consumer interests. The Bulletin, as currently drafted, puts this essential objective at risk. We look forward to working with your office as you review stakeholder comments and revise your plans to create an EHB standard that is consistent with the letter and intent of the law.


Don Hazaert, Director


Cindy Mann, Deputy Administrator and Director

Center for Medicaid, CHIP, and Survey and Certification

Steven B. Larsen, Deputy Administrator and Director

Center for Consumer Information and Insurance Oversight (CCIIO)

Timothy Hill, Deputy Center & Policy Director


Olga Dazzo, Director

Michigan Department of Community Health (MDCH)

Chris Priest, Director

Bureau of Medicaid Policy and Health System Innovation (Michigan)

Kevin Clinton, Commissioner

Office of Financial and Insurance Regulation

Category: Media