Changes to EHB coverage standards in the 2025 NBPP and their importance for low-income individuals
The U.S. Department of Health and Human Services (HHS) recently released the Notice of Benefit & Payment Parameters for plan year 2025 (2025 NBPP) and, with it, significant changes to the way the federal government defines coverage of Essential Health Benefits (EHBs). EHBs are a set of categories of health care services that all non-grandfathered individual and small-group market plans, as well as Medicaid Alternative Benefit Plans (ABPs), must cover. They represent the Affordable Care Act’s solution to ensuring that expanded eligibility for coverage (through Medicaid Expansion and Marketplace coverage) resulted in access to a minimum level of necessary health services. The ACA gave HHS the authority to define EHB services, but it required that, at a minimum, they include services in ten categories of benefits that were typically covered minimally or not covered at all before the ACA (including maternity and newborn care, mental health and substance use disorder services, and rehabilitative and habilitative services).
EHBs and the way HHS defines them have a significant impact on low-income individuals and families. First, the ACA requires states to ensure that Medicaid expansion populations have access to at least all EHBs as defined by HHS. Many states have aligned Medicaid Expansion coverage with traditional Medicaid benefits. While most states provide more generous coverage under traditional Medicaid, in those states with less-than-optimal traditional Medicaid benefits, the EHB requirement ensures that low-income adults have access to a wider set of services. In addition, in states that have not aligned coverage between expansion and traditional Medicaid, EHBs ensure that coverage for low-income adults is robust even if it does not rise to the level of traditional Medicaid.
Moreover, in states that have not expanded Medicaid, low-income adults not otherwise eligible for traditional Medicaid often rely on Marketplace coverage for health care. In those instances, EHBs ensure that individuals who are not on Medicaid solely because of opposition from conservative politicians can access a minimum level of necessary care. Finally, in states with robust traditional Medicaid coverage that have aligned benefits, EHBs help ensure that individuals with higher incomes can access a comprehensive set of services through the Marketplace without having to resort to public programs for their care, allowing states to better utilize public funding for lower-income beneficiaries.
EHBs also serve an important role in improving health equity. Many of the basic benefits we now know as EHBs are services that help address conditions that disproportionately impact Black, Indigenous, and Other People of Color (BIPOC), LGBTQIA+ individuals, people with disabilities, among other underserved communities. Some of these services may also lead to worsening conditions that are more prevalent among non-dominant racial groups and marginalized communities. As such, improving EHB standards is essential to continue addressing unmet health needs and reducing health disparities.
Given the importance of EHBs for low-income individuals and underserved communities, advocates should be aware of the framework that HHS has established for defining EHB and periodic updates to this framework. Because HHS has deferred some of this authority to states through what is known as the EHB benchmarking process, stakeholders should also engage with their states to advocate for changes that are necessary to close access gaps in the specific state. At the same time, it is important that advocates understand how federal regulations impact the way states define EHBs for both Medicaid expansion populations (through ABP coverage) and Marketplace plans. In the same way, NHeLP has been engaged with HHS asking for improvements to EHB coverage in certain areas including sexual and reproductive health care, mental health and SUD services, durable medical equipment services and devices, prescription drugs, pediatric care, and dental services. Again, these are areas where gaps disproportionately affect low-income individuals and underserved communities.
The 2025 NBPP proposes several changes that will have a positive impact on coverage of EHBs by giving states more room to adopt new coverage requirements for their Marketplace plans and Medicaid ABPs. The explainer attached to this blog goes over these changes in detail, while also discussing other areas where action will still be needed after the proposed rule is finalized. We urge stakeholders and low-income and Medicaid advocates to review the proposals and evaluate how they could impact beneficiaries in your states and communities. The deadline to submit comments on these proposed changes is January 8, 2024. As always, NHeLP remains available for questions and technical assistance regarding EHBs and the changes proposed in the 2025 NBPP.
