States to weigh in on basic health coverage (Reuters)

(Reuters) – U.S. health officials will allow states to select the basic set of medical benefits that must be offered by insurance plans participating in new exchanges mandated by the federal healthcare overhaul, the U.S. government said on Friday.

The Department of Health and Human Services announcement relates to the so-called essential health benefits for millions of Americans expected to qualify for coverage sold through state-based insurance exchanges beginning in 2014.

“Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs,” HHS Secretary Kathleen Sebelius said in a statement.

Under the approach announced on Friday, states can select an existing health plan to set the “benchmark” for services included in the essential health benefits package.

As benchmarks, states would be able to choose either: One of the three largest small employer plans in the state; one of the three largest state employee health plans; one of the three largest federal employee health plan options; or the largest health maintenance organization plan offered in the state’s commercial market.

The essential benefits are perhaps the most anticipated piece of information still awaited by states, employers, health providers and especially insurers under President Barack Obama’s landmark healthcare overhaul.

The exchanges are designed to create easy access to an open marketplace of insurance plans and to allow uninsured people and small businesses to band together to negotiate cheaper rates for healthcare coverage, as well as automatically be considered for government subsidies.

HHS has been subject to intense lobbying over the rule as virtually the entire U.S. healthcare system, including insurers such as Aetna Inc and WellPoint Inc, could be affected by it.

(Reporting By Lewis Krauskopf; additional reporting by Anna Yukhananov in Washington; Editing by Lisa Von Ahn and Gunna Dickson)

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