Feds design health plan for the masses

WASHINGTON – The federal government is taking on a crucial new role in the nation’s health care, designing a basic benefits package for millions of privately insured Americans. A framework for the Obama administration was released Thursday.

The report by independent experts from the Institute of Medicine lays out guidelines for deciding what to include in the new “essential benefits package,” how to keep it affordable for small businesses and taxpayers, and also scientifically up to date.

About 68 million Americans, many of them currently insured, ultimately would be affected by the new benefits package. That’s bigger than the number of seniors enrolled in Medicare.

The advisers recommended that the package be built on mid-tier health plans currently offered by small employers, expanded to include certain services such as mental health, and squeezed into a real-world budget.

They did not spell out a list of services to cover, but they did recommend that the government require evidence of cost effectiveness.

“In this day and age, when we are talking about fiscal responsibility, it’s a report that recognized that we have to take account of what we can afford while trying to make sure that people have adequate coverage,” said panel member Elizabeth McGlynn, director of Kaiser Permanente’s center for effectiveness and safety research.

Until now, designing benefits has been the job of insurers, employers and state officials. But the new health care law requires insurance companies to provide at least the federally approved package if they want to sell to small businesses, families and individuals through new state markets set to open in 2014.

Most existing workplace plans won’t be required to adopt the federal model, but employers and consumer advocates alike predict it will become the nation’s benchmark for health insurance over time.

With the nation divided over President Barack Obama’s health care overhaul law, and Republicans condemning it as a government takeover, the administration reacted cautiously to the recommendations.

Health and Human Services Secretary Kathleen Sebelius said in a statement that officials would hold “listening sessions” around the country before any final decisions are made, which could take months. The IOM panel recommended an extensive effort to engage the public.

The law extends coverage to about 30 million uninsured people.