'Defining Minimum Creditable Coverage' by Alan Weil

The technical challenge faced by the Connector—to define “minimum creditable coverage”—is a complex policy and value choice that will affect the terms of the health insurance debate around the country.

States have made a number of efforts over the years to express their views about what is so important it belongs in everyone’s health insurance package. A handful of states establish standard benefit packages that define the options available to individuals and small businesses that buy health insurance. All states require some combination of services be covered in insurance products sold in their state. These so-called “mandated benefits” can include everything from chiropractic care to fertility treatments to coverage for newborn children. But, by federal law, these rules cannot apply to larger employers who self-fund their insurance rather than purchase it.

Oregon made national headlines for trying to set a priority list of diagnoses and services that would be covered, while those of limited value would be excluded. The original vision was to extend health insurance to everyone in the state and use the outcome of the priority process to define that coverage. Ultimately, the priority process was only applied to a subset of Medicaid enrollees.

The Massachusetts approach, with its individual mandate, avoids the constraints of federal law. Employers are free to offer whatever coverage they want, but it would be odd for them to offer something that doesn’t meet the terms of the mandate since their employees would then have to go out and find a different product on their own.

The trade-offs in setting minimum creditable coverage are clear. A more comprehensive plan has higher costs and is more disruptive of existing coverage. A narrower plan leaves people with unmet needs and reduces the pooling of risk.

As other states pursue universal coverage they, too, will confront the question of what they mean by coverage. Their answers will depend upon their social values, their sense of what is affordable, and the lessons they learn from Massachusetts.

Alan Weil is the Executive Director of the National Academy for State Health Policy