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Informing Policy. Advancing Health.

Now, It’s Up to the States

December 20, 2011

As most political observers last week watched the fate of short-term fixes – payroll tax relief, the Medicare ‘doc fix’ and the like – those of us in the health policy world were struck by other late-breaking news.

I refer to HHS Secretary Sebelius’ bulletin, released last Friday, that indicates a new tack. States will now be allowed to determine what “essential benefits” health plans will be required to cover in the new state insurance exchanges.

Regardless of your politics or position on the Affordable Care Act (ACA), the air was collectively let out of many health policy balloons. Policy analysts have watched for nearly two years for the announcement related to the “essential health benefit package.” According to the ACA, the individual mandate will require nearly every American to purchase health insurance or pay a penalty. The “essential benefits” will specify what exactly is in that purchased package.

And now, after many months of analysis, town-hall style meetings across the country, position papers disseminated by advocacy groups, academics and others, it will be up to the states to decide. It’s a victory, of sorts, for states’ rights groups. It’s also widely regarded as a transparent move on the part of the Obama Administration to diffuse criticism about an overly centralized approach to health care.

But what this will do is put enormous pressure on states to come to a determination on a very complex issue. And states will have to do so in a matter of months, not years, in order to meet the deadlines set forth in the ACA -- namely, that all insurance benefits exchanges be operational in 2014. States must not only decide on the essential benefits package but also on the process by which to determine the package. At its crux, the benefit package needs to balance comprehensiveness of care and affordability. At the state or national level, it’s a heavy lift.

Colorado over the past year has created a forum for dialogue around issues related to reform and the benefits exchange. It has an established governance board and a legislative review committee and hired a new director. Building the exchange itself is an enormous challenge. The essential benefits question will undoubtedly contribute to its complexity. And now, all us health policy wonks will await their decisions.