HHS defers to states, will let them decide which benefits health plans must cover

The Obama administration said Friday that it will defer to the states on one of the most important mandates in the healthcare reform law.

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The Health and Human Services Department said states will take the lead in determining the benefits that every health plan will soon have to cover.

Defining “essential health benefits” is among the most important steps in implementing the Affordable Care Act. The law lists 10 broad categories of benefits that every plan sold to individuals and small businesses will have to cover, beginning in 2014. It leaves the specifics of that mandate to HHS. And HHS said it intends to pass the job down to states.

The move could help allay fears that the benefit mandates would drive up the cost of insurance.

States will be able to pick an existing health plan, and the benefits that plan offers within the health law’s 10 categories will be the essential benefits in that state.

HHS outlined its approach Friday but did not release formal regulations implementing the policy.