One of the great challenges facing the folks who have been tasked to implement the Big O’s health care law is defining “essential benefits,” the core medical services that insurers must cover.

Despite its voluminous nature, the law is remarkably vague in this regard. It does identify 10 care categories that health plans must provide to consumers who use federally-funded health insurance exchanges to select a plan, but the categories and associated lists aren’t comprehensive or specific (the categories appear at the end of this post).

The Institute of Medicine has been tasked to flesh out the lists of required services. It has begun work amid a frenzy of lobbying by private insurers and consumer groups. Habilitative services are one contentious area, and they illustrate the challenges faced by the IOM. Unlike rehabilitative services which help people recover lost skills, habilitative services help them acquire new ones.

Habilitative services can help autistic children improve language skills, or those with cerebral palsy learn to walk. They can also help a person with schizophrenia improve his social skills.

These services tend to be expensive because they are provided over several years. Insurers tend not to cover them. Their justification (when one is given) is that they are experimental or educational.

How expensive can habilitative services be? The consultancy Oliver Wyman estimated they can run in excess of $60,000 per year for younger children. These numbers drop substantially once the child becomes more independent. (more…)