The federal government issued a new rule in February regarding the Essential Health Benefits (EHBs) that must be included in all individual and small-group health plans sold in or outside of ACA Exchanges. This rule may lead to improved “habilitative” services for children with disabilities. Habilitative services are “Health care services that help you keep, learn, or improve skills and functioning for daily living.” (See https://www.healthcare.gov/glossary/habilitative-habilitation-services/.) For children with special needs, this could include services such as speech, physical, and occupational therapies.
Under the previous regulations, insurers could define habilitative services themselves if the state benchmark plan did not include those services and the state did not establish its own definition. Under the new rule, effective for plans beginning in 2016, there will be a federal definition of habilitative services,[i] which will apply if the state benchmark plan does not cover habilitative services and the state does not define them.[ii] No longer will insurance issuers have the flexibility to establish their own definitions.
In addition, the February 2015 rule prohibits health plans from placing coverage limits on habilitative services that are less favorable than any limits imposed on rehabilitative services.[iii] Moreover, beginning in 2017, states must have separate limits on habilitative and rehabilitative services.[iv] They cannot combine those services into one benefit.
What Does this Mean?
A Commonwealth Fund analysis[v] of 2014 policies showed that benchmark plans in 28 states and the District of Columbia (DC) included habilitative services. Five of these states and DC also established a specific definition of habilitative services. In cases where the benchmark plan didn’t include habilitation services, 11 states created a definition and 11 states allowed insurers to do so. (As noted above, insurers will no longer be able to create their own definitions after 2016, however.) This means that habilitative services will be different for children with special needs depending upon the state in which they reside. Parents can find their state’s benchmark plan on the Centers for Medicaid and Medicare Services (CMS) website (see Resources.)
What’s Happening in the States?
Ø Arkansas requires parity with rehabilitation and coverage of specific habilitation services.
Ø California also requires parity and is considering legislation that would adopt the federal definition of habilitative services for plans beginning after January 1, 2016.
Ø The Hawaii legislature considered a bill to include speech/swallowing therapy, ABA (applied behavioral analysis), medical equipment, orthotics, and prosthetics as habilitative services but the bill didn’t pass.
Although there will be differences in states regarding which therapies are available to children with disabilities, it is good news that there is now a federal definition of habilitative services. Previously, many insurance companies would only provide rehabilitative services to regain lost skills (such as learning to speak again after a stroke, or walking again after a car accident). They would deny therapies for children as “developmental” or “educational.” Now more children with special needs will have access to the therapies they need.
This tip sheet is based on an ACA blog authored by Lauren Agoratus, M.A. Lauren is the parent of a child with multiple disabilities who serves as the Coordinator for Family Voices-NJ and as the southern coordinator in her the New Jersey Family-to-Family Health Information Center, both housed at the Statewide Parent Advocacy Network (SPAN) at www.spanadvocacy.org. More of Lauren’s tips about the ACA can be found on the website of the Family Voices National Center for Family/Professional Partnerships: http://www.fv-ncfpp.org/.