By Alex Wayne – Bloomberg News
The Obama administration avoided a potentially brutal lobbying battle over the medical benefits insurers must cover under the U.S. health- care overhaul when it decided last week to hand the decision off to states.
The Dec. 16Â ruling, coming less than a year before the presidential elections, gives states the power toÂ set coverage levelsÂ for the policies uninsured people will buy through regulated marketplaces, called exchanges, starting in 2014. Business groups will argue for a narrow set of benefits to save costs while consumer advocates push for expanded coverage.
The decision shifts the debate to statehouses and away from the White House, and lets PresidentÂ Barack ObamaÂ say heâ€™s giving governors and legislatures more flexibility within their own communities to confront rising medical costs and control changes the 2010 health-care law is bringing to insurance markets.
â€œObama has taken all the grief he can stand over health care,â€ saidÂ Erik Gordon, a business professor at theÂ University of MichiganÂ inÂ Ann Arbor, in an e-mail â€œHe doesnâ€™t want it to give the Republicans any more political ammunition. He is passing the hot potato to the states.â€
About 24 million people are projected to buy coverage through exchanges by 2019, according to theÂ Congressional Budget Office. Premiums will average $5,800 for individuals and $15,200 for families in 2016.
Under the new guidelines, state lawmakers must either set coverage levels in line with widely subscribed small- business plans in their communities, or peg them to benefits included in their state employeesâ€™ health plan, federal employee plans or the largest commercial managed- care plan in the state.
Generally, health plans for small businesses, state employees and federal workers â€œcover similar services,â€ including doctorsâ€™ visits, hospitalization and outpatient mental health, according to aÂ studyÂ conducted by the U.S. Health and Human Services Department ahead of the Dec. 16 announcement.
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