KY Policy Blog

Getting Rid of Essential Health Benefits Means Less Coverage, More Costs for Kentuckians

By Jason Bailey
March 24, 2017

The House has amended their healthcare repeal to include eliminating a requirement that insurance plans in the individual and small group markets cover a list of ten essential health benefits. Those include maternity care, pediatric dental services, and mental health and substance abuse treatment. The bill already stripped those required benefits from the Medicaid program, which covers 1.3 million people in Kentucky.

Here’s what getting rid of essential health benefit rules from private insurance would mean for Kentuckians:

People with pre-existing conditions won’t be able to find plans that cover the services they need. Without essential health benefits standards, pre-existing conditions protections that benefit 1.9 million Kentuckians with such conditions would exist in name only. That’s because repeal of essential health benefits would drive a race to the bottom, with insurers dropping coverage for everything from chemotherapy to high-cost drugs in order to discourage enrollment by sicker, more costly enrollees. People with pre-existing conditions – who need these and other costly services – wouldn’t be able to find the coverage they need at any price, much less an affordable one. The fact that insurers have to sell them coverage is meaningless if they can’t find a plan that covers the treatment they need.

Plans will be able to impose annual and lifetime limits on coverage – including for Kentuckians who get health coverage through their jobs. The Affordable Care Act (ACA) prohibited plans from imposing annual or lifetime limits on coverage – but only on coverage of essential health benefits. Plans can still impose annual or lifetime limits on services not classified as essential health benefits (such as adult dental coverage). That means that if federal essential health benefits standards are repealed, and essential health benefit rules in Kentucky are weakened, plans could go back to imposing coverage limits on anything from emergency services to inpatient care to prescription drugs – even for kids.

Before the ACA, 1.4 million Kentuckians with private health insurance – the large majority with employer plans – had policies that imposed lifetime limits on coverage. Repealing essential health benefit requirements could mean going back to a time when thousands Kentuckians with health coverage through their jobs were one major illness away from medical bankruptcy.

Individual market plans won’t cover substance use treatment, mental health treatment, maternity care or other key services. Before there were federal standards requiring plans to cover these benefits, many (for some benefits, most) policies didn’t. A small additional pot of money for Kentucky to provide treatment for opioid use disorder and other behavioral health needs won’t make up for the fact that thousands of Kentuckians with health insurance will have to pay out of pocket for treatment.

Women will again be charged more than men for coverage. Eliminating essential health benefit requirements means that women would once again be charged more than men, since they’d have to pay more for plans with maternity coverage — if they could find them at all.

Find out more about the harm from eliminating essential health benefits here.

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