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Choosing a Benchmark Health Insurance Plan: Decision or Default?

Essential health benefits are the minimum set of ten health services that must be included in most health insurance plans starting in 2014.

Colorado moved one step closer to selecting its benchmark insurance plan late Friday, issuing its long-awaited recommendation. It chose Kaiser Ded/CO HMO 1200D, the state’s largest small group plan.

This side-by-side comparison of the nine benchmark plan options under consideration shows how coverage within each plan matches up against one another as well as against Colorado and federal benefit mandates.

Establishing a benchmark of standard benefits provides a common starting point among health insurance plans to assist consumers when comparing and selecting plans.

The Kaiser plan was selected based on a range of factors, according to an August 31 letter from the Colorado Health Benefit Exchange, Division of Insurance and the Office of the Governor.  These included reviewing the objectives laid out at the beginning of the selection process—coverage of state-mandated benefits as well as the ten federally required benefit categories, minimizing disruption in the insurance marketplace, balancing comprehensiveness and affordability—and consideration of public comments provided in writing and at two public meetings in July

The benchmark recommendation establishes the overall framework or blueprint for services included in benefit packages and does not impact other aspects of benefits, such as provider networks within specific plans or patient deductibles, co-payments or other cost-sharing provisions.

The ten required services include ambulatory patient services, emergency services, hospitalization, laboratory services, maternity and newborn care, mental health and substance use disorder services, prescription drugs, preventive/wellness and chronic disease management, rehabilitative/habilitative services and pediatric services including oral/vision care. 

In addition to the benchmark plan, the letter outlined preliminary recommendations for incorporating pediatric dental benefits and habilitative services. These benefits are included in the essential health benefits but their inclusion in health insurance plans varies. Because of this variation, the Department of Health and Human Services outlined options for states to include these services. The preliminary benchmark recommended plan does not include a pediatric dental benefit nor benefit provisions for habilitation.

The state is recommending the Colorado’s Child Health Plan Plus (CHP+) dental services benefit to supplement the benchmark plan, citing its current use in Colorado and the potential for ensuring seamless coverage with minimal service disruption. Some written public comments suggested that CHP+ be selected based on its benefit design targeted to younger populations, while others suggested the CHP+ benefit be supplemented to increase the frequency of preventive and diagnostic dental examinations.

Although neither defined in federal guidance nor Colorado statute, habilitative services are generally considered to help individuals learn new skills necessary for daily living while rehabilitative services focus on regaining skills that may have been lost. Habilitative and rehabilitative categories often include the same health services such as physical therapy, speech therapy and occupational therapy. The state is recommending that habilitative services be offered “at parity”, or at similar coverage levels, with existing rehabilitative benefits. Whether habiltative benefits would be additive, a separate and additional benefit, or cumulative, included with rehabilitative benefits, remains undecided pending further federal guidance.

Public comment on the preliminary recommendation will be accepted through September 10. Colorado must submit its final decision to the Department of Health and Human Services (HHS) by October 1. If the state does not meet this deadline, HHS will assign Colorado a “default” benchmark plan, defined as the state’s largest small group plan—the Kaiser Ded/CO HMO 1200D.