The Implications of Cutting Essential Health Benefits

An Analysis of Nongroup Insurance Premiums Under the ACA

A nurse help a mom with her newborn baby checking vital signs.

Essential health benefits (EHBs) targeted for cuts in reform debate represent a small share of total monthly premiums.

 

 

The Issue

Analysis shows the EHBs covered under the Affordable Care Act (ACA), and targeted for cuts in repeal and replace legislation, represent less than 10 percent of total monthly premiums.

Key Findings

  • Benefit requirements targeted for cuts account for a small share of premiums—maternity and newborn care account for six percent; habilitative and rehabilitative care, two percent; and pediatric dental and vision care, one percent.

  • Largest shares of premiums come from services generally seen as fundamental to health insurance—office-based care (30%), prescription drugs (22%), outpatient facility care (17%), and inpatient care (15%).

  • If maternity and newborn care were cut from EHBs—meaning only users of these services would finance the costs now covered by insurance—the additional premium cost would be $13,888 annually.

Conclusion 

The per-person costs of insuring EHBs are reasonably low, and account for small percentages of the overall premium when the costs are spread broadly across a large population with diverse ages and health care risks. Experts note that placing the costs fully on the users of health care can make those services unaffordable for those who need them.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute's Health Policy Center for more information specific to its staff and its recent research.