A proposed regulation from the U.S. Department of Health and Human Services (HHS) could prompt states to set less generous levels of coverage in their individual and small group marketplaces, possibly eroding coverage of occupational therapy for people in many states. The Trump Administration says the proposed changes will foster lower premiums and more choices for people who buy insurance on their own or from small-group plans. The changes would apply to plan years 2019 and beyond. On November 27, 2017 AOTA submitted comments on the proposal that you can read here.  

Each year, HHS issues a set of regulations called the Notice of Benefit and Payment Parameters (NBPP, or the payment notice), which set the rules of the road for the Affordable Care Act (ACA) marketplaces. This year, the Administration wants to use the payment notice to change the way states determine the scope of benefits offered by individual and small group health plans. The law requires such plans to cover 10 categories of essential health benefits (EHB), but states fill in those categories by selecting a “benchmark” plan that others must emulate.

Under the framework proposed in the payment notice, states could update their benchmarks more frequently and select between more options. States could:

  • Keep their current EHB benchmark
  • Use another state’s benchmark plan
  • Replace one or more EHB categories with the same category from another state
  • Select a new set of benefits that would become the state’s benchmark, within certain limitations on the scope and generosity of the new plan

“Rehabilitative and habilitative services and devices” is one of the 10 EHB categories; AOTA advocated for its inclusion when the ACA was being written. AOTA is afraid that it might be one of the first ones that states roll back. The Congressional Budget Office has projected that rehabilitation and habilitation is one of the EHB categories that the states would be most likely to waive if given the opportunity.[1] Depending on how they use the new flexibility, states could decide to seek out a more limited benefit package or piece together a less generous package with elements from other states. AOTA’s 2014 and 2016 reports on rehabilitation and habilitation in ACA-compliant plans (here and here) found a lot of variation between the states, with very low visit limits for occupational therapy in some of them.   

The fourth option would let states completely rewrite their benchmark, as long as it still covered the 10 EHBs and the scope of covered benefits was similar to a typical employer plan. However, the payment notice would define “typical employer plan” as any plan (small group, large group, or self-insured) with at least 5,000 enrollees, a significant change from current practice that would let states build their benchmark based on a plan that doesn’t actually include the kinds of items and services that most employer plans in their state cover.

The payment notice would also give insurance companies more leeway to substitute benefits in marketplace plans, which might lead some plans to eliminate certain rehabilitation and habilitation services as long as they replace them with other benefits of similar value. For the first time, benefit substitution would be allowed both within and between categories (e.g., replacing a service that falls under the rehabilitation and habilitation EHB with one from the laboratory services EHB). That could make it easier for a plan to replace services that individuals with disabilities or serious health conditions need with other benefits that would attract healthier consumers.

Watch this blog for an update when HHS releases the final rule. You can read the proposed Notice of Benefit and Payment Parameters for 2019 at https://www.gpo.gov/fdsys/pkg/FR-2017-11-02/pdf/2017-23599.pdf.

[1] Congressional Budget Office, cost estimate for H.R. 1628, the American Health Care Act of 2017 (May 2017), https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628aspassed.pdf