Practitioners of so-called “complementary and alternative medicine” currently enjoy a certain measure of government largesse in the form of state laws mandating coverage of their services by private health insurance plans. The federal Patient Protection and Affordable Care Act (often referred to as the Affordable Care Act, or “ACA,” and sometimes as “Obamacare”) has the potential of putting a significant dent in this forced coverage of pseudoscientific health care.
All states require private health insurers to cover certain health care services by law. These mandates can be in the form of requirements that specific health care services or treatments be covered, that certain providers be covered, or that certain populations be covered.
Mandates are ubiquitous, inconsistent among states and costly. One insurance industry trade group calculates that there are currently 2,262 separate state mandates. Some are supported by clear evidence of benefit, such as immunizations and mammograms. Others, unfortunately, require coverage of “CAM” services, such as acupuncture and chiropractic. (In fact, acupuncture is typically not covered by small group plans unless required by state mandate.) Whether beneficial or not, all agree that these mandates increase premium costs to the consumer, most estimated to be from less than one percent to five percent of premiums, depending on the mandate. Chiropractic coverage, for example, can vary from state to state, from limiting the insured to a specific number of visits per year all the way to requiring chiropractors to be covered on par with medical doctors.
The ACA’s effect on state mandates
The ACA is nothing if not complicated, but bear with me. Under the ACA, all health insurance plans sold to individuals and small businesses must cover “essential health benefits” (EHBs). This includes plans sold on the state-run exchanges, where certain individuals (including those who wouldn’t otherwise have access to health insurance) can purchase insurance. The ACA requires these plans to cover:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Congress left it up to the U.S. Department of Health and Human Services (HHS) to further define “essential health benefits” within these broad categories. The individual states will continue in their role as health insurance regulators, although they must now operate within the parameters of the ACA. As mentioned, state functions include management of the ACA-mandated health insurance exchanges, where federal subsidies are available to assist those who cannot afford the premiums. Importantly, the ACA prevents federal subsidies from paying for state mandates which exceed EHBs, as defined by HHS. States will be required to pick up the tab for the extra cost of non-EHB mandates themselves. This is a huge disincentive for states to keep mandates that do not fall within the EHB definition.
Institute of Medicine recommendations
How HHS defines EHBs will be critical step in ridding the private health insurance system of CAM. To help decide what EHBs should include, HHS turned to the Institute of Medicine
to recommend a process that would help HHS do two things: 1) define the benefits that should be in the EHB, and 2) update the benefits to take into account advances in science, gaps in access, and the impact of any benefit changes on cost. . . . The charge of the [IOM] committee specifically was not to decide what is covered in the EHB but rather to propose a set of criteria and methods that should be used in deciding what benefits are most important for coverage.
Two summaries of the IOM’s recommendations indicate that, if followed by HHS, those recommendations could go a long way in eliminating pseudoscience from insurance coverage. In one summary, the IOM stated that “only medically necessary services should be covered” and that the benefit package “needs to be based on credible evidence of effectiveness.” In a second report summary setting forth specific EHB criteria, the IOM included these salient features under the topic heading “Criteria to Guide EHB Content on Specific Components:”
The individual service, device or drug for the EHB must:
Be safe – expected benefits should be greater than expected harms.
Be medically effective and supported by a sufficient evidence base, or in the absence of evidence on effectiveness, a credible standard of care is used.
Demonstrate meaningful improvement in outcomes over current effective services/treatments.
Be a medical service, not serving primarily a social or educational service.
Be cost effective, so that the health gain for individual and population health is sufficient to justify the additional cost to taxpayers and consumers.
In addition, the IOM included as criteria under the topic, “Criteria to Guide Methods for Defining and Updating the EHB:”
Methods for defining, updating, and prioritizing must be:
Transparent. The rational for all decisions about benefit design, and changes is made publicly available. . . .
Sensitive to value. To be accountable to taxpayers and plan members, the covered service must provide a meaningful health benefit. . . .
Responsive to new information. EHB will change over time as new scientific information becomes available. . . .
Data driven. An evaluation of the care included in the EHB is based on objective clinical evidence and actuarial reviews.
If you find this less than a perfect recipe for the delivery of science-based medicine, it is nevertheless a vast improvement over the current system of state mandates, where coverage is too often based on the lobbying efforts of special interest groups. If these strictures are implemented, we should see the eventual elimination of coverage for acupuncture and a good bit of chiropractic and naturopathy. At the very least, if coverage decisions are transparent, those decisions which fudge on the evidence will be sitting there in plain view, open for criticism.
HHS on EHBs
HHS has yet to issue regulations (which would be legally binding) defining exactly what “essential health benefits” are, but some guidance has been issued so that the states can begin setting up their health insurance exchanges. Unfortunately, HHS has opted for a system which retains state mandates, at least for now, and fails to fully implement the IOM’s recommendations. HHS decided that states can formulate the minimum requirements for a health insurance plan by choosing, within certain limits, an existing health plan offered in their state as a benchmark. All insurance plans offered on the exchanges and in the individual and small group markets must be “substantially equal” to the benchmark plan.
For 2014 and 2015, states can choose benchmark plans subject to state mandates. Because benchmark plans define what EHBs are for a particular state, the state mandates would automatically be within the definition of EHBs if a private insurance plan is chosen. This is essentially a run-around of the requirement that the federal government not pay for state mandates.
However, there is room for optimism. Starting in 2016, HHS will revisit the benchmark issue and has the option of excluding any particular state mandate from EHBs. This means that if a state chose a benchmark plan which included state mandates, the state would have to pick up the tab for the cost of those benefits axed by HHS. Given the fiscal situation of states, it is highly unlikely they will continue to mandate coverage for benefits they must pay for through premium subsidies for those who cannot afford to purchase insurance via the exchanges.
As the ACA matures, there is even greater potential for elimination of CAM. One of the primary missions of the Affordable Care Act is to make health insurance, well, more affordable. To the extent plans are larded with ineffective CAM treatments that do not improve outcomes they defeat the purpose of the ACA. Fortunately, the ACA requires HHS to periodically review and update EHBs, using, among other criteria, changes in medical evidence and scientific advancement. So, finally, the government will be legally required to look at the evidence in determining what benefits must be covered by private health insurance.
According to HHS, private insurers will be required to look at the evidence as well.
Under the benchmark framework, we note that the provision of a ‘substantially equal’ standard would allow health insurance issuers to update their benefits on an annual basis and they would be expected on an ongoing basis to reflect improvements in the quality and practice of medicine.
Finally, HHS said that the “benchmark approach” isn’t the last word in determining EHBs. It intends to propose a process of evaluation of this initial system. Again, changes in medical evidence and scientific advancement are a legally mandated part of this evaluation.
California implements the ACA
Let’s see how the ACA is playing out in California. California Senate Bill 951 and the similar Assembly Bill 1453, both of which define the EHBs for California under the ACA, are moving through the state legislature. Both peg EHBs to a Kaiser Foundation small group HMO. The original bills included specific services which must be covered by plans, including acupuncture and chiropractic services. However, the bills in their current form exclude specific coverage mandates.
While most consumer health groups lauded the plan, or were at least optimistic, guess who was complaining about lack of coverage? According to California Healthline, “representatives for the chiropractic industry . . . worried that those services weren’t adequately included among the essential benefits.” And, according to a legislative committee report, the California Chiropractic Association opposed Senate Bill 951 unless it was amended, asking that the Legislature reexamine the possible choices for an EHB plan to select one that includes chiropractic benefits. (It is not clear to me whether the benchmark Kaiser plan totally excludes chiropractic coverage or substantially limits it.)
As well, “The Council of Acupuncture and Oriental Medicine Association write they are pleased to see SB 951 recognize acupuncture as an EHB, but they are concerned SB 951 will only apply to acupuncture for treatment of pain and nausea.” This is so even though acupuncture doesn’t work, but it’s a step in the right direction.
Thus, even though states, at this point, need not base coverage decisions on actual evidence, at least one state (and a large one at that) has voluntarily chosen to limit coverage of two CAM providers. Let’s hope this is a trend.
In sum, the ACA requires that individual and small group health insurance policies cover “essential health benefits,” which the Department of Health and Human Services is working to define. HHS has turned to the Institute of Medicine for advice, which, if taken, will require that EHBs be both cost effective and evidence based as determined through a transparent process. This should eventually severely curtail or eliminate legally required coverage of “CAM” practices. If state legislatures mandate non-ESB coverage, such as “CAM” practices, those states will be required to absorb the additional cost in subsidies for people who can’t afford premiums.
In the interim, states can choose benchmark plans on which all individual and small group policies must be based. Mindful that keeping costs down is essential to the success of the health insurance purchasing exchanges required by the ACA, states are more likely to choose benchmarks which offer no-frills benefits. If California’s experience is any indication, efforts will be made to curtail, if not eliminate, CAM from essential benefits packages during this interim period.
As cost considerations and evidence-based decisions take hold in the coming years (if all goes as planned and the ACA remains law), we should see CAM providers eliminated or, at the least, more severely curtailed in health insurance coverage. Perhaps I am being overly optimistic, but the mechanisms are certainly in place for this to happen. And since you and I pay for CAM coverage through increased premiums, it will be an economic benefit to us all.