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AOA Advocacy Group answers members’ common questions on new insurance marketplaces, essential health benefits

June 5, 2013

The new health insurance marketplaces and other initiatives authorized under the Affordable Care Act of 2010 (ACA) will provide coverage for up to 30 million Americans, according to estimates by the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT).

Optometrists will have the opportunity to provide care under the health insurance plans offered through new marketplaces, the AOA Advocacy Group noted. The marketplaces may also offer optometrists opportunities to obtain health insurance for themselves, their families or their employees.

However, with the scheduled implementation of the new health insurance marketplace system now just six months away, many optometrists still have questions about the marketplaces, the plans that will be offered through the marketplaces, and the health care those plans will cover.

Summarized here by the AOA Advocacy Group are answers to some of the most common questions posed by AOA members regarding health insurance marketplaces.

Q: What is a “marketplace”?

A: Health insurance marketplaces are the federal government’s attempt to rebrand what were formerly termed “exchanges” with a more consumer‐friendly term. Many states running their own marketplaces will likely rebrand the exchange with a local brand name. For example, in Massachusetts the exchange is called the
Massachusetts Connector, and in California it will be called Connect California.

Q: What is a QHP?

A: A QHP is a qualified health plan or a health plan certified by either the state or the federal government (depending on the type of marketplace the state has) as compliant with state law and the federal requirements of the ACA that must be met in order to sell in the marketplaces.

Q: What is the “federal option”?

A: The “federal option” refers to a federally facilitated marketplace (or exchange) that is a result of a state not informing the federal government it will be running its own health insurance marketplace or when a state forms a partnership with the federal government to operate a marketplace.

Q: What does the federal option mean for my state?

A: In essence, the federal option marketplaces are basically websites that will sell health plans in states; the websites will be operated by the federal government. The websites will be similar to e-commerce websites (think Amazon or Netflix) where users can enter their information and, depending on their income level, either be directed to the state’s Medicaid program or a selection of QHP products. The federal government will not actively manage the marketplaces aside from certifying QHPs, which will be the job of state insurance commissioners.

Q: What is the essential benefit package?

A: The essential benefit package is a set of 10 benefits spelled out in the ACA that all health plans in the new health insurance marketplaces (and non-grandfathered individual and small group plans outside of the exchange) must cover at a minimum. With the exception of the pediatric dental benefit, these benefits must be integrated within medical plan coverage. This is the list of essential health benefits that must be included in the package:

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
10. Pediatric services, including oral and vision care.

Q: What is the pediatric vision benefit?

A: The pediatric vision benefit is one of the 10 essential benefits spelled out by the ACA that create a basic benefit package for all health plans sold in the new health insurance marketplaces (exchanges) and many plans outside of the marketplaces. Thanks to the advocacy of the AOA and state affiliates who fought for a strong benefit, the pediatric vision benefit will be a yearly eye exam with a materials benefit for every patient under age 19.

Q: Why is the pediatric vision benefit a victory for optometry?

A: After nearly a decade of determined advocacy by countless AOA member volunteers and staff, federal policymakers officially recognized what AOA members know from experience: that early and periodic comprehensive eye exams and follow‐up care are “essential” to ensuring the overall health, development, and academic success for children. Basically, coverage of eye health and vision care is now a medical benefit embedded within the health plans sold in the marketplaces, and everyone who buys a plan in the marketplaces must, at a minimum, have this coverage. For the first time, the federal government is requiring private payers to cover eye exams and materials benefits for children and is linking medical eye care and vision care together under the same plan.

Q: How did the AOA convince the HHS to make the benefit an exam and not a screening?

A: Several powerful and well‐funded groups pushed very hard to try and diminish the pediatric vision benefit, including ophthalmologists, pediatricians, insurance plans, and a range of business groups, by perpetuating a myth that defining the kid’s vision benefit as a comprehensive eye exam without having to first fail an undefined vision screening would be prohibitively expensive. Conversely, the AOA and state affiliates worked hard to show the minimal cost and maximum health benefits of early and periodic eye exams. In the end, the Department of Health & Human Services (HHS) sided with the AOA, explaining that the essential benefit was supposed to mirror private insurance, which allows patients to directly access their vision benefits without having to first fail a vision screening.

Q: Why is pediatric vision mandatory as part of a medical insurance plan in the exchange and pediatric dental is not?

A: Under the ACA, pediatric vision is required to be integrated into the health plan like all other essential benefits; however, dental is treated differently because health plans do not have to include the pediatric dental benefit if there is a standalone plan selling dental benefits within the exchange. Also, under the law, individuals are not required to pay directly for essential benefits, but are required to purchase coverage through a health plan that meets acceptable coverage levels to satisfy the individual mandate. Because health plans operating within the exchanges may not necessarily include pediatric dental benefits, many people are expected to not purchase the optional dental coverage as there currently is no requirement for them to do so. Additionally, there will be no refundable tax credit for those who purchase the standalone dental benefit because, under the law, the tax credit applies only to qualified health plans.

Q: Is Davis Vision going to administer the pediatric vision benefit for all federally facilitated exchanges because it already administers the FEDVIP plan?

A: Davis Vision does administer the product sold to federal employees, but that does not mean that Davis Vision or any vision plan will be the default provider of the pediatric vision benefit in the federally facilitated exchange. The benefit, regardless of which health plans sell in the marketplaces, will be sold by the QHP in a seamless, integrated manner because it is a required essential benefit. However, under the ACA, QHPs may decide to contract out their vision services to be administered by vision plans including Davis Vision, VSP or any other vision plan.

Q: What is the benchmark?

A: The benchmark is a health plan in a state whose benefit package was chosen to be the basis for all health plans that wish to sell in that state’s health insurance marketplace. States had a choice between the top three in each of these categories: small group plans, state employee plans and federal employee plans, or the largest HMO in the state. The selection in each state was only used to determine the minimum benefit package that must be offered (covered benefits); reimbursement and provider network makeup were not considered or examined in this process. The benchmark plan will not necessarily be one of the plans that consumers can actually purchase in the marketplaces.

Q: What is a private exchange?

A: A private exchange is the private market version of a state marketplace and does not face the same regulatory requirements as the public marketplaces. Private exchanges are currently being set up across the country and will compete directly against the government marketplace in many cases. Typically, these exchanges are run by insurance companies, large employers, employer coalitions, large benefits consulting firms, insurance industry entrepreneurs and other entities that have an interest in drawing customers out of the government marketplace. Health plans sold in these exchanges will have many of the same benefits as the marketplace plans, but may not have a standardized benefit package, and vision plans will be allowed to sell separately from health plans in these exchanges. Some private exchanges already exist. Examples include ehealthinsurance.com and Bloom Health.

For information on how optometrists can get health insurance coverage for themselves or their practices through the new insurance marketplaces, see “Health insurance marketplaces (exchanges): What optometrists need to know as small business owners” in the March 2013 edition of AOA News.

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