BY THE ASSOCIATED PRESS

RICHMOND

Virginia Secretary of Health & Human Resources Bill Hazel told the Senate Finance Committee that Virginia faces deadlines this fall on determining which benefits will be required in basic health insurance plans sold to individuals and small businesses in the state.

Virginia was one of the states that challenged the health care overhaul, which was upheld by the U.S. Supreme Court in June.

The federal health law set 10 basic categories that must be covered by health plans, such as emergency services, prescription drugs and maternity care. But within those categories, states have flexibility to determine a basic level of covered services and costs.

States will select one existing health plan to serve as a benchmark or guide. If states don't choose a benchmark, the federal government steps in to name an existing popular small group plan in the state as the default benchmark. States also can add services to insurance coverage, which could add to the cost of premiums.

Virginia also must decide whether to establish its own insurance exchange, a key component of the health care law that permits people to shop for health insurance and buy policies, Hazel said. Officials also are exploring changes to Medicaid, a program for the needy, elderly, blind, disabled and poor families with children that is funded jointly by federal and state governments.

Despite the pending federal deadlines, Hazel said the state legislature will ultimately have a say in what Virginia's health care system looks like moving forward.

"We are still doing everything we can to keep our options open for you," Hazel told legislators. "The difficulties that we have are there are still some unknowns out there that make it really hard to know what is the optimal decision."