Basic Health Program rules issued

The Center for Medicare & Medicaid Services (CMS) has unveiled proposed regulations implementing a provision of the Patient Protection and Affordable Care Act authorizing states to establish a Basic Health Program (BHP) for low-income individuals not eligible for Medicaid. BHP eligibles must earn more than 133 percent but less than 200 percent of the federal poverty level and not be eligible for an employer plan providing minimum required coverage.

In some states and especially those with smaller and poorer populations, the BHP could significantly reduce exchange enrollments. Even large states such as California could see exchange enrollments reduced. A 2012 study by the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research concluded a BHP would cut that state’s exchange enrollment by between 720,000 and 950,000 individuals and could limit the exchange’s bargaining power with health plan issuers in the individual market.

The proposed rule does not specifically mention guidance CMS issued in December 2012 allowing state-based exchanges to offer Medicaid “bridge plans” to people transitioning from Medicaid or CHIP coverage to a commercial plan sold on the state exchange. The guidance authorizes state-based exchanges to contract with an issuer of a Medicaid managed care plan to offer bridge plans as qualified health plans in order to allow enrollees to remain with their existing medical providers.

Since BHPs are targeted at the same income demographic, it’s unclear how the bridge plans will be affected. California enacted legislation (SBX1-3) this July authorizing a 5-year program for the sale of Medicaid bridge plans on that state’s exchange for those earning up to 250 percent of federal poverty, subject to CMS approval.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

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Frederick Pilot

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