Essential health benefits and the Affordable Care Act: law and process.

Starting in 2014, the Affordable Care Act (ACA) will require private insurance plans sold in the individual and small-group markets to cover a roster of "essential health benefits." Precisely which benefits should count as essential, however, was left to the discretion of the Department of Health and Human Services (HHS). The matter was both important and controversial. Nonetheless, HHS announced its policy by posting on the Internet a thirteen-page bulletin stating that it would allow each state to define essential benefits for itself. On both substance and procedure, the move was surprising. The state-by-state approach departed from the uniform, federal standard that the ACA appears to anticipate and that informed observers expected HHS to adopt. And announcing the policy through an Internet bulletin appeared to allow HHS to sidestep traditional administrative procedures, including notice and comment, immediate review in the courts, and White House oversight. This article explores two questions. First, is the state-by-state approach a lawful exercise of HHS's authority? Second, did HHS in fact evade the procedural obligations that are meant to shape the exercise of its discretion?