Prepared by Peggy McManus, MHS for the American Academy of Pediatrics July 2012

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2 A Comparative Review of Essential Health Benefits Pertinent to Children in Large Federal, State, and Small Group Health Insurance Plans: Implications for Selecting State Benchmark Plans Prepared by Peggy McManus, MHS for the American Academy of Pediatrics July 2012 Executive Summary This report compares benefit and cost-sharing policies pertinent to children in the three largest federal employee health plans and in one of the largest state employee and small group plans in Alabama, Colorado, Maryland, Texas, and Washington. The purpose of this study is to examine how well these plans meet the needs of children from birth through age 21, including those with special health care needs, and what policy issues the U.S. Department of Health and Human Services (HHS) and states will likely face in selecting and monitoring states benchmark plans under the Affordable Care Act (ACA). Overall, federal employee plans offered the most comprehensive coverage for children, followed next by state employee plans. Small group plans, with some exceptions, have the most limited coverage and cost-sharing policies for children. Of course, none of these plans compared to the expansive coverage available in Medicaid s Early Periodic Screening, Diagnosis and Treatment (EPSDT) program or even in separate Children s Health Insurance Program (CHIP) plans. Two categories of essential health benefits (EHBs) rehabilitative and habilitative services and pediatric services, including oral and vision (as well as hearing) services will likely need to be supplemented, as required by HHS, because coverage was often missing. Specifically, plans surveyed in this study often failed to cover or specify habilitative therapy and private duty nursing, and they also excluded or failed to articulate coverage for specific preventive, diagnostic, and restorative oral services as well as services such as hearing aids and hearing-related implants. At issue will be the extent to which, even with added coverage, oral health and habilitative services will be sufficient to meet the basic and specialized needs of children. With respect to preventive and wellness services, plans sometimes failed to specify their policies regarding routine hearing and vision as part of well-child care and also allergy testing and treatment, nutritional counseling, diabetic education, and smoking cessation treatment. Consistent with requirements under the ACA, HHS and states will need to ensure that qualified health plans clearly indicate coverage consistent with Bright Futures. Oversight of new preventive care cost-sharing prohibitions will be needed, as this study discovered a few plans still charging copayments or applying deductibles to well-child care and prenatal care, services for which no cost-sharing is allowed under the ACA. i Importantly also, mental health parity requirements will need to be continuously enforced, as this study found examples of differences in coverage and cost-sharing for both outpatient and inpatient mental health and substance abuse treatment services versus general outpatient and inpatient hospital care. 1

3 Another area of concern pertains to the already high level of deductibles and cost-sharing in the federal, state, and small group plans studied. Since so many benefits are currently subject to deductibles and also have significant cost-sharing requirements, it will be critical for HHS and states to carefully consider potential access and medical debt issues as they select their benchmark options and define their cost-sharing features under bronze, silver, gold, and platinum plans. Families will need to be fully informed that their choice of plans must take into account not only the premium amount but also the deductibles, copayments, coinsurance, and maximum benefit amounts. It will be critical that families annual out-of-pocket maximum contributions be set at reasonable levels in order to protect against excessive financial risk. A hospitalization or emergency room visit, for example, will result in very high costs for families unless their out-of-pocket maximum contribution is set at an affordable amount. Moreover, many families may not realize until they are at the point of using a given service that the deductible must first be met. To the extent feasible, it is important that plans are selected without deductibles applied to primary care services and prescription drugs. Of course, for many low to moderate income families, cost-sharing protections are built into the ACA. ii The issue of state mandates is another critical area of concern. For many children with special health care needs, mandates have been adopted that allow for additional medically necessary therapeutic services. However, certain plans including federal plans, some small group plans, and Health Maintenance Organizations (HMOs) are not likely to offer these expanded services. iii That is, when certain children have therapeutic needs that extend beyond the covered benefits or that exceed the families financial means, their options will be limited. Take, for example, a 16-year-old who is severely injured in a car accident and who requires extended therapies and home care. Future deliberations regarding the use of Medicaid through spend-down iv or the use of Medicaid or CHIP as a wrap-around/supplemental option will need to be considered by HHS. Alternatively, HHS may want to consider using a state s CHIP plan as the benchmark plan for children. All of these are important options that would enable families to have more comprehensive insurance protection for their children. Introduction and Methodology HHS has directed states to select one of several existing health insurance plans to serve as the benchmark plan that defines their EHB package. Under the ACA, the EHB must be covered by all qualified health plans in state health insurance exchanges and all non-grandfathered plans outside of exchanges as well as by Basic Health Program and Medicaid benchmark and benchmark-equivalent plans. These benchmark options include 1) one of the three largest small group plans in the state by enrollment, 2) one of the three largest state employee health plans by enrollment, 3) one of the three largest federal employee health plan options by enrollment, and 4) the largest HMO plan offered in the state s commercial market by enrollment. States are now in the process of deciding which of these options to select as their EHB benchmark plan. 2

4 This report examines how federal, state, and small group insurance plans will likely meet the needs of children and adolescents, including those with special health care needs. The report includes a comparison of coverage and cost-sharing policies available in the three largest federal employee plans and one of the largest state employee and small group insurance plans in each of five states, effective in The five states in our study are Alabama, Colorado, Maryland, Texas, and Washington. These states were selected to represent a geographic and population mix. For comparison purposes, Medicaid and CHIP plans in these same five states were also examined. Information for federal employee plans was available online. Information for state employee and small group plans was obtained from the state insurance commissioner s office, the state health insurance exchange coordinator s office, the state employee benefit office, or through direct communication with the insurance carrier. Medicaid and CHIP information was obtained directly from each state s program office or website. For the most part, standard insurance contracts or certificates of coverage were reviewed. A total of 59 services pertinent to children s health care were examined under the 10 EHB categories required by HHS to implement the ACA: 1) ambulatory patient services, 2) emergency services, 3) hospitalization, 4) maternity and newborn care, 5) mental health and substance use disorder services, including behavioral health treatment, 6) prescription drugs, 7) rehabilitative and habilitative services and devices, 8) laboratory services, 9) preventive and wellness services and chronic disease management, and 10) pediatric services, including oral and vision care. v Plan coverage and cost-sharing policies reported on were for preferred, or in-network, providers. For many services, coverage and cost-sharing policies were not specified, and it is likely that coverage for these services is not available. There are several limitations with this study. Most importantly, states will be selecting their benchmark health plan using 2013 plan options. Therefore, the plans reviewed in this report are only illustrative of the plan policies that states will be reviewing. In addition, several of the benefit exclusions or limitations described in this report will be remedied, at least in part, by states in order to be consistent with new HHS requirements. vi Further, many of the cost-sharing policies described in this report will be adjusted to reflect the actuarial value of bronze, silver, gold, and platinum products. Another limitation of the study is that the largest commercial HMO products were not analyzed in the five states. In addition, the scope of each plan s coverage policies does not take into account prior authorization requirements nor does it take into account the specific types of health care organizations and professionals defined by the plan to be preferred. Finally, the pediatric services described in this report are limited to the dental, vision, and hearing services specified in the ACA statutory language. The AAP and other child health organizations have advocated for a much more comprehensive definition of pediatric services consistent with Medicaid s EPSDT benefit definition. This report is intended for use by federal and state officials as well as by child health professional and advocacy organizations. It is organized into four sections: 1) an executive summary, 2) benefits and cost-sharing in federal and state benchmark plans, 3) strengths and weaknesses of the 10 EHB categories under federal and state employee and small group options, and 4) comparison of coverage in Medicaid and separate CHIP programs. A set of five tables provides detailed benefit information on the federal and state employee and small group plans and the separate CHIP and Medicaid/EPSDT programs. 3

5 Benefits and Cost-Sharing in Federal and State Benchmark Plans A. Federal Employee Insurance Plans The three largest federal employee health plan options in 2012 are all Preferred Provider Organizations (PPOs): two Blue Cross and Blue Shield Service (BCBS) Benefit Plans (standard and basic options) and the Government Employees Health Association (GEHA) Benefit Plan. Overall, these plans were not substantially different in terms of scope of coverage. Eight of the 10 EHB categories were covered with few if any benefit restrictions, as shown in Table 1. Only the rehabilitative/habilitative services and devices category and the pediatric oral, vision, and hearing services category had excluded or limited services. The specific services most often excluded were habilitative therapy, private duty nursing, residential treatment for mental health and substance abuse disorders, and primary tooth crowns. The services most often limited were physical, occupational, and speech therapies; fillings; tooth extractions; and hearing aids. With respect to cost-sharing, also shown in Table 1, the differences across the three plans were more apparent. The BCBS Basic Option imposed no family deductible, unlike the other two plans that each required a $700 annual family deductible. This deductible was typically applied to emergency services, inpatient and outpatient hospital care, rehabilitative therapies, laboratory services, and hearing services. The BCBS Standard Option applied the deductible to many more services than GEHA. The three federal employee plans used a combination of copayments and coinsurance requirements. Copayment levels for primary care physicians were between $10 and $25, and for specialists, between $25 and $35. For hospital services, copayments ranged from $150/day up to $750/admission. Coinsurance rates were often set at 15% for several EHBs, with higher rates for a few specific services, most often brand-name prescription drugs. Maximum dollar amounts were applied to several dental services in all three plans. On a positive note, all three federal plans offered a similar set of services at no charge, including preventive care for children and immunizations, prenatal care, nutritional counseling, and smoking cessation treatment. B. State Employee Health Insurance Plans Among the largest state employee health benefit plans reviewed in Alabama, Colorado, Maryland, Texas, and Washington, three were BlueCross BlueShield PPO products and two were HMO products (Kaiser Foundation Health Plan and Group Health Cooperative Plan). Compared to federal employee insurance options, coverage policies in these state employee plans were not quite as generous and were also more variable. Seven of the 10 EHBs were covered with few if any restrictions. Most often benefit exclusions or limitations were imposed on rehabilitative/habilitative services; pediatric oral, vision, and hearing services; and also on mental health and substance abuse services, as shown in Table 2. Exclusions were often applied to eyeglasses, contacts, and implantable hearing devices. Services that had visit limits or dollar maximum amounts were physical, occupational, and speech therapies; hearing aids; and home nursing care. The mental health/substance abuse visit limits were found in two of the five state employee plans. Specifically, one plan restricted outpatient treatment for mental disorders to 20 visits per year and for substance abuse disorders to 40 visits. Another plan limited outpatient mental health treatment to 30 visits per year, except for individuals with a serious mental disorder defined by state law to include bipolar disorders, depression in childhood and adolescence, obsessive compulsive disorders, paranoid and other psychotic disorders, pervasive developmental disorders, schizo-affective disorders, and schizophrenia. 4

6 Large state employee benefit plans in four of the five states used a more complicated mix of deductibles, copayments, and coinsurance than the federal employee benefit plans. While only two of the five states imposed a family deductible ($300 and $750, respectively), four out of the five state employee plans imposed significant cost-sharing on two services in particular hospital care (both inpatient and outpatient care) and brand-name drugs. Copayments for ambulatory services, including outpatient mental health and substance abuse services, were typically between $15 and $50 per visit. Copayments for emergency room and hospital services ranged from $150/day to $750/admission. Coinsurance rates were often set at 20% for several EHB categories, but as high as 50% for dental care. State employee plans were less likely to offer services at no charge than federal plans. In fact, one plan still charged for well-child exams in Also, one plan imposed cost-sharing for inpatient behavioral health care at $150/day up to a maximum of $750/day plus 20% for the first 15 days and 40% for the next 15 days. C. Small Group Insurance Plans Among the largest small group plans reviewed in the five states, two were BCBS PPO plans, one was a UnitedHealth point-of-service plan, and two were HMO plans (BCBS and Kaiser Foundation Plan). Coverage under these five plans was less expansive than in the state employee plans. Still, coverage of ambulatory services, emergency services, inpatient services, maternity and newborn care, drugs, labs, and preventive care was generous. Gaps in coverage were mostly found for rehabilitative/habilitative services and especially for pediatric oral, vision, and hearing services. Of particular concern was the large number of services that were not specified and presumably not covered far more than in either the state or federal employee health plans. For the most part, as shown in Table 3, services not specified were psychological testing, partial hospitalization for mental health/substance abuse treatment, private duty nursing, genetic testing, preventive and restorative dental care, vision care, and hearing services. With respect to cost-sharing, a big difference was found between small group plans and state and federal employee plans with respect to the use of higher family deductibles ranging from $1,000 to $1,500. In three of the small group states, a separate, lower deductible was applied to certain services ambulatory services and prescription drugs. Deductibles were applied to a relatively large number of services (between 11 and 22, depending on the plan), including in a couple of instances services that are offered at no charge, such as prenatal care and delivery. Copayment rates for primary care physicians ranged from $20-$35, and for specialists, between $20 and $50. Not unlike state employee plans, hospital and emergency room copays were either $100 or $200. The difference in copayments among a Tier 1 generic drug versus a Tier 3 non-preferred brand name was four-fold or higher. Coinsurance rates were most often set at 20%. One small group HMO plan covered numerous services at no charge in addition to well-child services specifically, ambulatory primary care provider services, outpatient mental health services, generic drugs, and diagnostic labs and imaging. 5

7 Strengths and Weaknesses of Federal and State Employee and Small Group Insurance Plans by EHB Category 1. Ambulatory Services Strengths: Primary care provider (PCP) and specialist services were covered in all of the 13 federal and state employee and small group plans reviewed. Weaknesses: In one state employee plan and one small group plan, families must first meet a deductible (of $300 and $350, respectively) before the insurer reimbursed for PCP or specialist services. 2. Emergency Services Strengths: Emergency facility and physician services were covered in all of the 13 federal, state, and small group plans reviewed. Weaknesses: Cost-sharing requirements were consistently used to discourage emergency care. In two of the federal employee plans, two of the state employee plans, and all of the small group plans, first the deductible must be met. In addition to the deductible, all of the plans imposed a copay (ranging from $100 - $200) and/or coinsurance (15%, 20%) for emergency services. One of the plans failed to specify its coverage of ambulance services, and another plan imposed a maximum benefit of $500 for ambulance services. 3. Hospitalization (Inpatient and Outpatient) Services Strengths: All of the federal and state employee and small group plans covered inpatient and outpatient hospital services without exclusions or limitations. Weaknesses: Two of the federal employee plans, one of the state employee plans, and four of the small group plans required that the deductible be met before hospital services were reimbursed. In addition, plans always imposed an additional copay ($25-$200/day, $200-$250/admission) and/or coinsurance fee (10%-20%). Outpatient hospital services had lower copayments. Several of the plans also charged separately for surgery. 6

8 4. Maternity and Newborn Care Strengths: All of the three largest federal employee plans covered prenatal care without charge, and two covered delivery services, as well, without charge. All of the state employee and small plans also covered prenatal and delivery services. Weaknesses: Three of the state employee plans and two of the small group plans imposed cost-sharing on prenatal care services. In addition, one of the state employee plans and three of the small employee plans applied the deductible to prenatal care. 5. Mental Health and Substance Abuse Services, Including Behavioral Health Treatment A. Licensed Professional Services, Psychotherapy, and Pharmacotherapy Strengths: All but two of the federal and state employee plans covered these mental health/substance abuse ambulatory services without any limits, just as they are covered in other ambulatory services. Two small group plans covered each of these services without charge. Weaknesses: Two state employee plans set visit limits on licensed professional services and psychotherapy. The first of these plans limited mental health outpatient treatment to 20 visits/year and substance abuse treatment to 40 visits/year. The second of these plans limited outpatient mental health treatment to 30 visits per year, except for individuals with a serious mental illness defined by the state s law to include bipolar disorders, depression in childhood and adolescence, major depressive disorders, obsessive compulsive disorders, paranoid and other psychotic disorders, pervasive developmental disorders, schizoaffective disorders, and schizophrenia. B. Outpatient Hospital and Partial Hospitalization Services Strengths: All of the federal employee plans offered both outpatient hospital and partial hospitalization services for treatment of mental health and substance abuse disorders. Two of the federal plans eliminated the deductible and charged either a copayment ($25) or coinsurance rate (15%). One small group plan required no charge for these services. Weaknesses: The same restrictions in the two state employee plans described above under licensed professional services apply to this benefit as well. In addition, partial hospitalization was also limited in one of these two plans to $75/day up to a maximum of $375 plus 20% for the first 15 days and 40% for the next 15 days. The other state employee plan had a 60-visit limit on partial hospitalization. Three of the small group plans and one of the state employee plans did not specify their coverage policy for partial hospitalization. 7

9 C. Inpatient Hospital and Residential Treatment Services Strengths: Five of the 13 federal, state, and small group plans covered both inpatient and residential services for treatment of mental health and substance abuse disorders, and one of the plans applied no cost-sharing for residential treatment services. Weaknesses: Two of the three federal plans did not cover residential treatment services. In addition, two of the state employee plans and four of the small group plans did not specify their policy for residential services. In one of the state employee plans, cost-sharing for inpatient mental health and substance abuse treatment was different than for general inpatient hospital care. It was $150/day up to a maximum of $750 plan and 20% for the first 15 days and 40% for the next 15 days (same as for outpatient hospital and partial hospitalization). In one of the small group plans, inpatient mental health services was limited to 30 days/year, and inpatient physician services for mental health and substance abuse treatment was subject to the deductible, unlike physician services in the general inpatient hospital benefit. D. Psychological Testing and Applied Behavioral Analysis Strengths: Five of the 13 plans covered psychological testing, and two without charge. Only one plan expressly covered applied behavioral analysis, consistent with its state mandate of coverage up to a maximum of $34,000 for children ages 0-8, and $12,000 for children ages Weaknesses: The majority of plans reviewed failed to specify their coverage policies for psychological testing and applied behavioral analysis. Two federal plans expressly excluded coverage for applied behavioral analysis. 6. Prescription Drugs Strengths: All 13 plans covered generic (Tier 1), preferred (Tier 2), and non-preferred drugs (Tier 3), most often with no deductible requirement. Copays for generic drugs were between $15-$20, with only one federal plan charging a 20% coinsurance rate. Weaknesses: Two small group plans applied a separate prescription drug deductible ($100 and $500, respectively). The copayment difference between generic and non-preferred brand name drugs was large in all plans four-fold or higher. The plan with the greatest difference a state employee plan charged a $20 copayment for a Tier 1 drug and a 50% coinsurance rate up to a maximum of $250 for a Tier 3 drug. 8

10 7. Rehabilitative and Habilitative Services and Devices A. Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST) Strengths: Three state employee plans covered PT without defined limits, and one covered OT and ST without limits. In one state employee plan and one small group plan, visit limits did not apply to children ages 0-3 in the state s early intervention program or to children with autism. Deductibles were not applied to rehabilitative therapies in two federal employee plans, three state employee plans, and three small plans. Weaknesses: In the three federal plans, coverage for PT, OT, and ST was limited to 50, 60, or 75 visits per therapy or combined. In all but one state employee plan, coverage for PT, OT, and ST was also restricted either 20, 30, 50 or 60 combined visits. Similar restrictions were imposed in all but one of the small group plans. B. Habilitative Therapy Strengths: Two states (in both the state employee and small group plans) covered habilitative therapy in one for youth with autism and in another for youth with congenital or genetic birth defects. Weaknesses: All three of the federal employee plans excluded habilitative therapy as a covered benefit, and one small group plan also excluded this benefit. More often state employee and small group plans failed to specify whether habilitative therapy was a covered benefit. C. Durable Medical Equipment (DME) and Medical Supplies Strengths: All of the federal employee benchmark plans covered DME and medical supplies. Three of the state employee plans and two of the small group plans covered these benefits. Weaknesses: The limitation for DME and medical supplies came in the form of a maximum benefit amount in one state employee plan and one small group plan ($2,000 and $5,000, respectively). Deductibles were required before reimbursement in five of the 13 plans reviewed two federal plans, two small group plans, and one state employee plan. 9

11 D. Home Nursing Care and Private Duty Nursing Strengths: Two of the state employee plans and two of the small group plans covered home nursing care without defined limits, and one of each of these plans eliminated cost-sharing for the benefit. (Home nursing care usually is provided by a physical, occupational, or speech therapist or home health aide.) Three of the state employee plans and one of the small group plans covered private duty nursing. (Private duty nursing is usually provided by a nurse who is delivering specialized care.) Weaknesses: All three federal plans excluded private duty nursing coverage, and one of the small group plans did as well. In addition, three of the small group plans and two of the state employee plans did not specify coverage of private duty nursing. Home nursing care was typically restricted to limits i.e., to 6 services/month, 25 visits/year, 28 hours/week, or 130 days/year. One of the small group plans limited its home nursing coverage only for enrollees who were homebound. 8. Laboratory Services A. Diagnostic Laboratory and X-rays and Imaging Strengths: All 13 of the federal, state, and small group plans covered diagnostic lab and X-rays and imaging services. Two of the state employee plans and one of the small group plans imposed no charge on lab and X-rays. Weaknesses: One small plan imposed a separate $350 deductible for imaging services. In about half of the 13 plans, the regular deductible applied. Generally, copayments ranged from $25-$100/test, and coinsurance rates were either 10% or 20%. B. Genetic Testing Strengths: Two of the 13 plans expressly covered genetic testing both federal employee plans. In one of these plans, there was no charge, but the deductible applied. Weaknesses: Four of the small group plans and three of the state employee plans failed to specify their coverage policies for genetic testing. 10

12 9. Preventive and Wellness Services and Chronic Disease Management A. Routine Physical Exams, Routine Hearing and Screening, and Immunizations Strengths: All of the 13 plans covered well-child exams and immunizations, and all but two expressly mentioned coverage for routine hearing and vision as part of the well-child exam. Weaknesses: One of the state employee plans imposed a copayment for well-child care, and one small plan applied its deductible to preventive care. B. Allergy Testing and Injections, Nutritional Counseling, Smoking Cessation Treatment, and Diabetic Education Strengths: All of the state employee plans and most of the other federal employee plans and small group plans covered allergy testing and injections. Weaknesses: One small group plan imposed a $200 maximum benefit and one federal plan imposed a $500 maximum benefit on allergy testing and injections. In addition, two small group plans, one federal employee plan, and one state employee plan imposed the deductible before reimbursement was provided. C. Nutritional Counseling Strengths: Five of the 13 plans expressly covered nutritional counseling services without limits (two federal plans, two state plans, and one small group plan), and three of these plans covered this service without any charge. Weaknesses: Four of the 13 plans all small group plans did not specify coverage of nutritional counseling services. Two of the plans covered nutritional counseling up to a maximum of $150 per lifetime in one plan and $250/year in the other. 11

13 D. Smoking Cessation Treatment Strengths: Seven of the 13 plans covered smoking cessation treatment, and five of these did so without any charge. Weaknesses: One state employee plan imposed a 20% coinsurance rate and a $150 maximum lifetime benefit for smoking cessation treatment. Five state plans failed to specify their coverage policy for this service. E. Diabetic Education Strengths: Seven of the 13 plans specifically covered diabetic education, four without charge. Weaknesses: Five state plans four small group plans and one state employee plan did not specify whether diabetic education was a covered benefit, and two required that the deductible be met. 10. Pediatric Services, including Oral and Vision Care and Hearing Services A. Preventive and Diagnostic Oral Care Strengths: With respect to periodic oral exams, prophylaxis, and fluoride treatment, two of the 13 plans covered these services, and one state employee plan covered them at no charge. With respect to radiographs, one of the 13 plans a state employee plan covered this service without cost-sharing. With respect to sealants, two plans covered them, and again, the same state plan without cost-sharing. Weaknesses: Two plans one state employee and one small group plan expressly excluded coverage for all preventive and diagnostic oral health care. More often, small plans failed to specify coverage for these services. Plans that covered this benefit often imposed limitations, usually in the form of a maximum per service benefit or a per total dental care benefit. Per service maximums ranged from $8 to $150 depending on the service and age of the child (younger than 13, older than 13), and per year dental maximum benefits were set at $1,500 and included all covered dental services (excluding in one case, orthodontic expenses). 12

14 B. Restorative Oral Care Strengths: Only one plan the same state employee plan that covered preventive oral health care covered fillings, crowns, and tooth extractions. Weaknesses: One state employee plan excluded all restorative dental services, and three small group plans and one state employee plan failed to specify coverage for these services. Orthodontic care was expressly excluded in six of the 13 plans (in three federal plans, two state employee plans, and one small group plan). The limitations that plans imposed similar to preventive and diagnostic oral care were maximum amounts per service or per all dental services. Another limitation was coverage only for accidental injury (in two plans). C. Vision Care Strengths: Ten of the 13 federal, state, and small group plans covered vision exams, one with no charge, and one plan covered eyeglasses and contacts without charge. Weaknesses: Six of the 13 plans excluded coverage of eyeglasses, and five excluded coverage of contacts. In a few plans, a maximum benefit was imposed on eyeglasses and contacts (i.e., $28.80 for single vision glasses; $150/year for eyeglasses and contacts). D. Hearing Services Strengths: Eight of the 13 plans covered hearing exams, four of which had no deductible requirements. Three of these plans also covered implanted hearing-related devices and one of these plans with no cost-sharing. Weaknesses: Three plans excluded coverage of hearing exams two state employee and one small group plan. Four of the plans that covered hearing aids applied the deductible first. One plan excluded coverage for hearing aids (a small group plan) and 10 imposed limits, usually a maximum benefit $100, $250, $500, $800, or $1,250/ear. Five of the 13 plans expressly excluded coverage of implanted hearing-related devices (four state employee plans and one small group plan), and two small group plans failed to specify their coverage policy. 13

15 Comparison of EHB Coverage in Separate Chip and Medicaid/EPSDT Coverage A. Separate CHIP Programs For comparison purposes, EHB coverage and cost-sharing policies were examined in the separate CHIP programs in Alabama, Colorado, Texas, and Washington. Maryland provided its CHIP enrollees Medicaid coverage. Washington s separate CHIP program had the same benefits as its state s Medicaid program for children, and except for premium requirements, there was no additional cost-sharing. Thus, for these two states, CHIP coverage and cost-sharing were comprehensive and free. In the other three states, with few exceptions, public insurance coverage of the EHBs under separate CHIP programs was far more generous than in all of the private options, as shown in Table 4. With few exceptions, the 10 EHB categories were generously covered. The only service exclusion found was for private duty nursing (one state) and orthodontics (one state). While several services were not specified, there is a reasonable likelihood that these services were covered if they met the state s medical necessity qualifications. Among the services most likely to fall into this category were applied behavioral analysis, psychological testing, partial hospitalization and residential treatment for mental health or substance abuse treatment, habilitative therapy, genetic testing, nutritional counseling, smoking cessation treatment, diabetic education, and implanted hearing-related devices. Cost-sharing policies in the four separate CHIP programs were either non-existent or very low, with the exception of one state that applied copays for most ambulatory services at $25 and hospital services at $125. No state imposed a family deductible. B. Medicaid/EPSDT Programs Also for comparison purposes, Medicaid s EPSDT policies were reviewed in the same five states. As shown on Table 5, all of the 10 EHB categories were comprehensively covered without cost-sharing. There are several services similar to those listed above that were not specified in the state documents reviewed. However, given the EPSDT federal mandate, the presumption is that most, if not all, of these services would be covered if deemed by the state to be medically necessary. Acknowledgements. This report has benefitted from the thoughtful review and comment of AAP staff, especially Robert Hall and Ielnaz Kashefipour. Also participating in providing useful suggestions were Molly Droge, MD, FAAP; Tom Long, MD, FAAP; Renee Turchi, MD, FAAP; Mike McManus, MD, FAAP (no relation to Peggy McManus); Dan Walter, Ian Van Dinther, and Lou Terranova from the AAP; Janice Guerney from Family Voices; Joe Touschner from Georgetown University s Center for Children and Families; Janice Kupiec with the American Dental Association; Melissa James with the Children s Hospital Association; and Meg Comeau with the Catalyst Center. 14

16 End Notes i ii iii iv v vi The ACA requirement to cover recommended preventive services without any cost-sharing requirements does not apply to grandfathered health plans. However, grandfathered plans are required to abide by other ACA requirements, such as prohibiting lifetime limits on coverage for essential health benefits. For individuals with incomes up to 400% of the Federal Povery Level (FPL), for 2014, the out-of-pocket limit will be equal to the current limit on out of pocket expenses for high deductible plans, $5,950 for self-only coverage and $11,900 for family coverage. For 2015 and beyond, the limits will be adjusted based on premium increases. For further explanation of the state mandates issue, please see: the Centers for Medicare and Medicaid Services (CMS) Frequently Asked Questions on Essential Health Benefits Bulletin, available at Individuals with higher incomes who meet a spend-down obligation can qualify for Medicaid coverage. Spend-down is met when, after deducting medical expenses from income, a person s remaining income is below the state s medically needy income level. See Essential Health Benefits: HHS Informational Bulletin. Posted on December 16, 2011 and updated on February 24, Available at Accessed on June 14, The ACA requires all plans in the Exchanges and all non-grandfathered plans outside of the Exchanges to cover without any cost-sharing recommended preventive services. For children, these recommended services are listed in the Periodicity Schedule of the Bright Futures Recommendations for Pediatric Preventive Health Care. ( Even if a state chooses a grandfathered plan as its benchmark plan, this provision of the ACA as well as other Patient s Bill of Rights provisions, still apply to plans in the Exchanges and non-grandfathered plans outside of the Exchanges. In other words, these plans must abide by both the EHB requirements as well as the Patient s Bill of Rights and other requirements of the ACA. In addition, any scope and duration limitations in a plan would be subject to review pursuant to ACA prohibitions on discrimination in benefit design. See: CMS Frequently Asked Questions on Essential Health Benefits Bulletin, Accessed on June 14,

17 TABLE 1. Coverage and Cost-Sharing for Essential Health Benefits Pertinent to Children in the Largest Federal Employee Health Plans Essential Health Benefits BCBS Standard 1 BCBS Basic 2 GEHA 3 Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing Annual Family Deductible $700 None $ Ambulatory services - PCP Y $20 Y $25 Y $10 - Specialist Y $30 Y $35 Y $25 2. Emergency services - Physician/facility Y (D) 15% Y $125 Y (D) 15% - Ambulance Y $100 Y $100 Y (D) NC 3. Hospitalization Inpatient Services Y (D) $250/ADM + 15% Y $150/day up to $750/ ADM Y (D) 15% - Surgical services Y (D) 15% Y $150/ surgeon Y (D) 15% Outpatient Services Y (D) 15% Y $75 Y (D) 15% - Surgical services Y (D) 15% Y $75 Y (D) 15% 4. Maternity and newborn care - Prenatal and postpartum care. Y NC Y NC Y NC - Delivery Y NC Y $150 Y NC - Routine nursery care Y NC Y NC Y NC 5. Mental health and substance abuse services, including behavioral health treatment - Licensed professional services Y $20/$30 Y $25/$35 Y $10 - Psychotherapy Y $20 Y $25 Y $10 - Pharmacotherapy Y $20 Y $25/$35 Y $10/$25 - Psychological testing Y 15% NS NS Y 15% - Applied behavioral analysis N N N N NC NC Outpatient services Y (D) 15% Y $25 Y 15% - Intensive outpatient services/partial hospitalization Inpatient services Y $250/ADM Y Y (D) 15% Y $25 Y 15% $150/day up to $750/ADM Y 15% - Residential services N N N N Y 15% Code: Y = Yes, benefit is covered N = No, benefit is not covered D = Deductible applies ADM = Admission NC = No charge MB = Maximum benefit TX = Treatment PCP = Primary care provider 16

18 Essential Health Benefits 6. Prescription drugs - Generic drugs (Tier 1) BCBS Standard BCBS Basic GEHA Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing Y (D) 20% Y $10 Y $5 - Preferred brand-name drugs (Tier 2) Y (D) 30% Y $40 L 24 50% - Non-preferred brand-name drugs (Tier 3) Y (D) 45% Y 50% L 24 50% 7. Rehabilitative and habilitative services and devices - Physical therapy L 4 $20/$30 L 15 $25/$35 L (D) 25 15% - Occupational therapy L 4 $20/$30 L 15 $25/$35 L (D) 25 15% - Speech therapy L 4 $20/$30 L 15 $25/$35 L (D) 25 15% - Habilitative therapy N N N N N N - Durable medical equipment Y (D) 15% Y 30% Y (D) 15% - Medical supplies Y (D) 15% Y 30% Y (D) 15% - Home nursing care L 5 15% L 16 $25 L (D) 26 15% - Private duty nursing N N N N Y N 8. Laboratory services - Diagnostic lab and X-rays Y (D) 15% Y $25 Y (D) 15% - Imaging (CT scans/mris/pet scans) Y (D) 15% Y $75 Y (D) 15% - Genetic testing Y (D) 15% Y $75 N N 9. Preventive and wellness services and chronic disease management - Routine physical exams/well-child visit Y NC Y NC Y NC - Routine hearing and vision screenings Y NC Y NC Y NC - Immunizations Y NC Y NC Y NC - Allergy testing and injections Y (D) 15% Y $25/$35 L 27 MB 27 - Nutritional counseling Y NC Y NC L 28 MB 28 - Smoking cessation treatment Y NC Y NC Y NC - Diabetic education Y (D) 15% Y $25/$35 Y NC Code: Y = Yes, benefit is covered N = No, benefit is not covered D = Deductible applies ADM = Admission NC = No charge MB = Maximum benefit TX = Treatment PCP = Primary care provider 17

19 Essential Health Benefits 10. Pediatric services, including oral and vision care Oral Care Preventive and Diagnostic - Periodic oral examinations BCBS Standard BCBS Basic GEHA Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing L (D) 6 MB 6 L 17 MB 17 Y 50% - Prophylaxis-child L (D) 7 MB 7 L 18 MB 18 Y 50% - Fluoride treatment L (D) 8 MB 8 Y NC Y 50% - Radiographs (two bitewing, panoramic) L (D) 9 MB 9 L 19 MB 19 L 29 50% - Sealants (permanent molar) Y (D) NC L 20 MB 20 NS NS Restorative - Two surface primary tooth composite filling L (D) 10 MB 10 L 21 MB 21 L 30 MB 30 - One surface permanent tooth composite filling L (D) 10 MB 10 L 22 MB 22 L 31 MB 31 - Anterior incisor fracture repair L (D) 11 MB 11 N N Y N - Primary tooth stainless steel crown N N N N L 32 NS 32 - Primary tooth extraction L (D) 12 MB 12 N N L 33 MB 33 - Bilateral fixed space maintainer Y (D) 13 MB 13 Y N NS NS - Orthodontics N N N N N N Vision Care - Vision examination Y $20 Y $25/$35 Y $5 - Eyeglasses L (D) 15% Y 30% Y $50 - Contact lenses L (D) 15% Y 30% Y 15% Hearing services - Hearing examination Y (D) 15% Y $25/$35 Y (D) 15% - Hearing aids L (D) 14 MB L 23 MB 23 Y (D) 35 MB - Implanted hearing related device NS NS NS NS Y (D) NS Code: Y = Yes, benefit is covered N = No, benefit is not covered D = Deductible applies ADM = Admission NC = No charge MB = Maximum benefit TX = Treatment PCP = Primary care provider 18

20 Table 1 Endnotes 1 The BlueCross and BlueShield Service Standard Option PPO Benefit Plan for 2012 was reviewed. 2 The BlueCross and BlueShield Service Basic Option PPO Benefit Plan for 2012 was reviewed. 3 The Government Employees Health Associate Standard Option PPO Benefit Plan for 2012 was reviewed. 4 In BCBS Standard, PT, OT, ST are limited to 50/year per therapy or combined. 5 In BCBS Standard, home nursing care is limited to 2 hours/day up to 25 visits a year. 6 In BCBS Standard, the periodic oral evaluation benefit maximum is $12/child < 13 and $8/child > In BCBS Standard, the prophylaxis benefit maximum is $22/child < 13 and $14/child > In BCBS Standard, the flouride benefit maximum is $22/child < 13 and $8/child > In BCBS Standard, the radiograph bitewing maximum is $19/child < 13 and $12/child > 13; the panoramic benefit maximum is $36/child < 13 and $25/child > In BCBS Standard, the one or two surface filling maximum benefit is $25/child < 13 and $16/child > In BCBS Standard, palliative treatment is limited to $24/child < 13 and $15/child > In BCBS Standard, the primary tooth extraction maximum benefit is $30/child < 13 and $19/child > In BCBS Standard, the space maintainer maximum benefit is $139/child < 13 and $87/child > In BCBS Standard, the hearing aid maximum benefit is $1,250 per hearing aid. 15 In BCBS Basic, PT, OT, and ST are limited to 75/therapy or combined. 16 In BCBS Basic, home nursing care is limited to 2 hours/day up to 25 visits/year. 17 In BCBS Basic, the periodic oral evaluation maximum benefit is $ In BCBS Basic, the prophylaxis maximum benefit is $ In BCBS Basic, the bitewing radiograph maximum benefit is $25/year; the panoramic radiograph maximum benefit is $150/year. 20 In BCBS Basic, the sealant maximum benefit is $ In BCBS Basic, the two surface primary tooth filling maximum benefit is $37/child < 13 and $23/child > In BCBS Basic, one surface permanent tooth composite filling maximum benefit is $ In BCBS Basic, the hearing aid maximum benefit is $1,250 per hearing aid. 24 In GEHA, the brand name prescription drug maximum benefit is $ In GEHA, PT, OT, and ST are limited to 60/year per therapy or combined. 26 In GEHA, home health nursing is limited to 2 hours/day up to 25 visits/year. 27 In GEHA, the allergy testing and injection maximum benefit is $ In GEHA, the nutritional counseling maximum benefit is $ In GEHA, the radiograph maximum benefit is $150/year. 30 In GEHA, the two surface filling maximum benefit is $ In GEHA, the one surface filling maximum benefit is $ In GEHA, crowns are covered only if the result of accidental injury. 33 In GEHA, the primary tooth extraction maximum benefit is $ In GEHA, contact lenses are covered only if required to correct an impairment existing after intraocular surgery or accidental injury. 35 In GEHA, the hearing aid maximum benefit is $

21 TABLE 2. Coverage and Cost-Sharing for Essential Health Benefits Pertinent to Children in Large State Employee Health Plans in Five States Essential Health Benefits Alabama 1 Colorado 16 Maryland 24 Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing Annual Family Deductible $300 None None 1. Ambulatory services - PCP Y $35 MD(D) $20 NP/PA Y $30 Y $15 - Specialist Y $30 (D) Y $50 Y $30 2. Emergency services - Physician/facility Y $35 MD(D) $20 NP/PA + $50 Y $100 Y $75/MD $75/ facility - Ambulance Y 20% Y 20% + $500 Y 10% 3. Hospitalization Inpatient Services Y $200(D) $25/day for days % Y $750/ADM Y 10% - Surgical services Y NAC Y NAC Y 10% Outpatient Services Y $100 Y $30/$50 Y 10% - Surgical services Y 20% Y $150 Y 10% 4. Maternity and newborn care - Prenatal and postpartum care. Y $35 MD $20 NP/PA Y NC Y 10% - Delivery Y $200(D) Y $750/ADM Y 10% - Routine nursery care Y 5. Mental health and substance abuse services, including behavioral health treatment + $25/day for days 2-5 Y NAC Y 10% - Licensed professional services L 2 $14 Y $30 Y 25 $ Psychotherapy L 2 $14 Y $30 indiv. $15 group Y $15 - Pharmacotherapy Y $14 Y $30 Y $15 - Psychological testing NS NS Y NS NS NS - Applied behavioral analysis NS NS L 17 MB 17 NS NS Outpatient services L 2 $14 Y $30 Y 10% - Intensive outpatient services/partial hospitalization L 3 20% Y $30 Y 15% Inpatient services Y 20% Y $750/ADM Y 10% - Residential services NS NS Y $750/ADM Y 10% Code: Y = Yes, benefit is covered NC = No charge SP = Specialist N = No, benefit is not covered MB = Maximum benefit TX = Treatment D = Deductible applies NP/PA = Nurse practitioner/physician assistant PCP = Primary care provider ADM = Admission NAC = No added charge 20

22 Essential Health Benefits 6. Prescription drugs - Generic drugs (Tier 1) Alabama Colorado Maryland Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing Y $10 Y $10 Y $10 - Preferred brand-name drugs (Tier 2) Y 20% iv Y $30 Y $25 - Non-preferred brand-name drugs (Tier 3) Y 20% v Y 20% with up to $75 Y $40 7. Rehabilitative and habilitative services and devices - Physical therapy Y 20% (D) L 18 $30 L 26 $30 - Occupational therapy L 6 20% (D) L 18 $30 L 26 $30 - Speech therapy L 7 20% (D) L 18, 19 $30 L 26 $30 - Habilitative therapy NS NS L 20 $30 L 26 $30 - Durable medical equipment Y 20% (D) L 21 MB 21 Y 10% - Medical supplies Y 20% (D) NS NS Y 10% - Home nursing care L 8 20% (D) L 22 NS L 27 10% - Private duty nursing Y 20% (D) NS NS Y 10% 8. Laboratory services - Diagnostic lab and x-rays Y Lab - $10 Xray - $75 Y NC Y 10% - Imaging (CT scans/mris/pet scans) Y $75 Y $100 Y 10% - Genetic testing NS NS N N Y NS 9. Preventive and wellness services and chronic disease management - Routine physical exams/well-child visit Y $35/$20 Y NC Y NC - Routine hearing and vision screenings NS NS Y NC Y NC - Immunizations Y NC Y NC Y NC - Allergy testing and injections Y 20% (D) Y $50 test $30 injection Y $15/PCP $30/SP - Nutritional counseling L 9 20% + MB 9 N N Y NC - Smoking cessation treatment L 10 20% + MB 10 Y NS NS NS - Diabetic education L 11 NC Y NS NS NS Code: Y = Yes, benefit is covered NC = No charge SP = Specialist N = No, benefit is not covered MB = Maximum benefit TX = Treatment D = Deductible applies NP/PA = Nurse practitioner/physician assistant PCP = Primary care provider ADM = Admission NAC = No added charge 21

23 Essential Health Benefits 10. Pediatric services, including oral and vision care Oral Care Preventive and Diagnostic - Periodic oral examinations Alabama Colorado Maryland Coverage Cost-Sharing Coverage Cost-Sharing Coverage Cost-Sharing L 12 MB xii NS NS N N - Prophylaxis-child L 12 MB 12 NS NS N N - Fluoride treatment NS NS NS NS N N - Radiographs (two bitewing, panoramic) L 13 MB 12 NS NS N N - Sealants (permanent molar) L 12 MB 12 NS NS N N Restorative - Two surface primary tooth composite filling L 12 $25 (D) 50% MB12 NS NS N N - One surface permanent tooth composite filling L 12 50% MB 12 NS NS N N - Anterior incisor fracture repair L 12 50% MB 12 NS NS N N - Primary tooth stainless steel crown L 12 50% MB 12 NS NS N N - Primary tooth extraction L 12 50% MB 12 NS NS N N - Bilateral fixed space maintainer L 12 50% MB 12 NS NS N N - Orthodontics L 14 50% MB 12 N N N N Vision Care - Vision examination Y $40 Y $30-optometrist $50 opthamologist L 28 $15 PCP $30 SP MB28 - Eyeglasses N N N N L 29 MB 29 - Contact lenses N N N N L 30 MB 30 Hearing services - Hearing examination N N Y $30 Y $15 - Hearing aids L 15 MB 15 L 23 MB 23 L 31 NC - Implanted hearing related device N N N N NS NS Code: Y = Yes, benefit is covered NC = No charge SP = Specialist N = No, benefit is not covered MB = Maximum benefit TX = Treatment D = Deductible applies NP/PA = Nurse practitioner/physician assistant PCP = Primary care provider ADM = Admission NAC = No added charge 22