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CMS Issues Final Rule on Essential Health Benefits

February 22, 2013—The Centers for Medicare and Medicaid Services (CMS) Feb. 20 issued a final rule  to implement provisions of the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) related to essential health benefits (EHB), a core package of benefits that health insurance issuers must cover both inside and outside the health insurance exchanges.

AAMC’s comments on the EHB proposed rule focused on annual limitations on cost-sharing and deductibles, updating EHB, oversight and enforcement, and prescription drug benefits.  The final rule included the following regarding these topics:

  • Annual limits on cost-sharing and deductibles: CMS finalized annual limitations on cost-sharing for all plans and the annual limitation on deductibles for plans offered in the small group market.  Starting in 2014, after these limits are reached, enrollees are not responsible for additional cost-sharing for EHBs for the remainder of the plan year.  CMS also finalized the special rule for network plans, which would exclude out-of-network services from counting toward these limits.  In response to comments opposing this exclusion from annual limits, CMS referenced the Institute of Medicine (IOM) recommendation to focus on the long term balance between affordability and comprehensiveness of coverage.  CMS also explained that the proposal does not prohibit an issuer from voluntarily establishing a maximum out-of-pocket limit applicable to out-of-network services, or a state from requiring that issuers do so.
  • Updating EHB and oversight and enforcement: CMS finalized the proposal to give primary authority to enforce the EHB requirements to the states, and the agency will take direct enforcement action against issuers in a state when it is evident that the state is not engaged in substantial enforcement. Consistent with suggestions in AAMC’s comments, CMS indicated that the agency is reviewing options for updating EHB in 2016 and anticipates releasing additional guidance in the future on enforcement of EHB requirements and updating EHB.

  • The prescription drug benefit: CMS finalized the proposal to require that plans cover at least the greater of: 1) one drug in every USP category and class; or 2) the same number of drugs in each category and class as the EHB-benchmark plan. 

Staff Contacts:

Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085

Jane Eilbacher
Policy and Regulatory Specialist
Telephone: 202-828-0896



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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806