By Deborah Bachrach, Melinda Dutton, Jennifer Tolbert and Julia Harris
Kaiser Family Foundation, March 2012
The Basic Health Program (BHP) is an optional coverage program under the Patient Protection and Affordable Care Act (ACA) that allows states to use federal tax subsidy dollars to offer subsidized coverage for individuals with incomes between 139-200% of the federal poverty level (FPL) who would otherwise be eligible to purchase coverage through state Health Insurance Exchanges. States can use the BHP to reduce the cost of health insurance coverage for these low-income consumers, a highly price-sensitive population with high rates of uninsurance. Depending on how it is designed, the BHP also can help consumers to maintain continuity among plans and providers as their income fluctuates above and below Medicaid levels.
As states weigh whether to implement a BHP, they face significant questions and challenges. Critical among these are how to design the BHP to enhance continuity of coverage as people move among Medicaid, the BHP, and coverage through qualified health plans (QHPs) in the Exchange; how to assess the BHP’s impact on the viability and effectiveness of state Exchanges; and how to estimate revenues and costs to evaluate the financial feasibility of the BHP.
Conclusion
Federal officials have yet to provide details about how the program will be financed, administered and certified, and states are struggling to evaluate the BHP’s impact on the viability and effectiveness of state Exchanges. Federal regulations will inform state deliberations, but are unlikely to fully resolve the complexity or eliminate the risk. Ultimately, states that opt for a BHP will want to design BHP programs so as to minimize the state’s financial exposure and address any negative impacts on the Exchange. States in which a BHP is not a viable option may want to consider alternative strategies to advance affordability and continuity goals.
http://www.kff.org/healthreform/upload/8283.pdf
Comment:
By Don McCanne, MD
The Basic Health Program is designed for individuals with incomes between 139-200% of the federal poverty level – a population that otherwise would be very vulnerable to cost sharing provisions of purchasing and using plans in the state insurance exchanges.
This report explains the moving levers that are required to construct such plans while being sure that benefits are adequate while costs are controlled for both the beneficiaries and the state and federal governments. With eligibility frequently shifting between Medicaid, the Basic Health Program, and the state exchange plans, it is clear that stability cannot be achieved. It is highly unlikely that plans can even be constructed that would meet the various goals for the patients, providers and state and federal governments, and, regardless, they would create an administrative nightmare.
Since the purpose of the Basic Health Program is to remove financial barriers to care for this vulnerable group, it only seems logical that this highly flawed plan should be discarded and replaced with an administratively simplified plan that removes access barriers not just for them, but for everyone – an improved Medicare for all.