Essential Benefits Set the Standard for Health Coverage in California

California lawmakers have sent two identical bills (SB 951 and AB 1453) to the governor to sign. The bills identify essential health benefits for individuals and small businesses starting in 2014. The benefits will apply to insurance plans sold through the state’s new health insurance exchange, which will offer federally subsidized plans for individuals and families who earn between 138% and 400% of the federal poverty level. Plans sold outside of the exchange must also meet these requirements.

The federal government has required essential health benefits to include services within 10 broad categories. States have the flexibility to refine those broad categories by choosing an existing health care plan that will serve as a benchmark come 2014. California has chosen the Kaiser HMO $30 deductible plan as its benchmark, according to a blog post by Emily Bazar of the California Health Foundation Center for Health Reporting.

According to a legislative analysis of SB 951, after January 1, 2014, any individual and small group health insurance plan that is sold or renewed in the state must include coverage for essential health benefits. Plans would have to include the same benefits and services that are covered by the Kaiser HMO $30 deductible plan. Essential benefits include the following:

• Mental health and substance abuse services will be covered in compliance with the Mental Health Parity and Addiction Equity Act of 2008.
• Pediatric vision care will be offered with the same benefits covered under the Federal Employees Dental and Vision Insurance Program.
• Pediatric oral care will be covered with the same benefits covered under Healthy Families including medically necessary orthodontic care.
• Habilitative services will be covered under the same terms and conditions that apply to rehabilitative services. The word “habilitative” has been at the heart of health insurance coverage denials for children with autism, according to Michele Winchester, JD of Institute for Health Law and Ethics.  Insurers describe habilitative services as educational or long-term care services, which are are not covered. Covered rehabilitative services treat conditions that result of an injury or illness.“Health insurers typically …deny coverage for behavioral therapies since the care is not rehabilitative,” she said. Examples of habilitative programs include supported employment and day services for adults. Federal Medicaid law says that habilitative services help people acquire, retain, and improve the skills to live successfully in home- and community-based settings. In contrast, “rehabilitative” services reduce a disability and restore a person to their best possible functional level. .

Last Updated 9/8/2017

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