IOM: Essential benefits must address cost, effectiveness

Insurers are getting a peek at what type of coverage they must provide if they participate in health insurance exchanges with the release of an Institute of Medicine (IOM) report. However, they may be disappointed because the IOM didn't provide many specifics, instead suggesting that the Department of Health & Human Services (HHS) consider cost and effectiveness when deciding what benefits to require, reports Kaiser Health News.

"The committee was concerned about affordability, not just for the individual but for small businesses and the government," Paul Fronstin, one of the members of the IOM committee that wrote the report, told the Wall Street Journal. "We wanted to give the secretary a tool to use as a test as to whether the package was affordable or not, keeping in mind that coverage is already unaffordable for a lot of people."

Rather than setting a level of benefits and then addressing costs, the report urges HHS to gauge potential services and products against a set of criteria--including medical effectiveness, safety, and relative value compared with alternative options--before deciding whether they should be covered, reports The Hill's Healthwatch.

IOM also said HHS should calculate the average premium that average small employer plans would pay in 2014 and ensure the essential benefits don't push premiums over that amount, according to the WSJ.

Although HHS still must issue the official requirements, it will likely strongly take the IOM report into consideration. HHS Secretary Kathleen Sebelius said that the department would be following IOM's recommendations to organize "listening sessions" to get input for what should be included. But HHS hasn't said when it intends to release rules that clarify which benefits must be included for the new plans, the WSJ notes.

To learn more:
- read the Institute of Medicine report
- check out the Wall Street Journal article
- view The Hill's Healthwatch article
- read the Kaiser Health News article

Related Articles:
Insurers to know exchange benefits recommendations by Oct. 7
Exchange benefits recommendations might be delayed
Exchange rule leaves payer requirements vague

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