Health Reform WK-EDGE Basic Health Plan funding for 2017 finalized
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Tuesday, March 8, 2016

Basic Health Plan funding for 2017 finalized

By Michelle L. Oxman, J.D., LL.M.

States that choose to operate a Basic Health Plan (BHP) in 2017 and 2018 can begin to plan for the level of federal funding they will receive. Under section 1331 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), states may offer the BHP to individuals who are not eligible for Medicaid and have incomes up to 200 percent of the federal poverty level (FPL). In the Final rule, CMS explained how it will calculate federal payments to states that operate this program (Final rule, 81 FR 10091, February 29, 2016.).

The BHP. States may offer the BHP to individuals who are not eligible for Medicaid and who do not purchase a qualified health plan (QHP) through the health insurance marketplace, or exchange. The federal government will provide funding at 95 percent of the premium tax credits and cost sharing reductions that the beneficiaries would have received if they had bought a QHP through the marketplace. States may use these funds to pay for the benefits available under BHP.

According to the Final rule, CMS’ payments will be determined from quarterly data that the state submits about the age, income, family size, coverage status, and geographic rating area of the anticipated enrollees. States will be required to submit this estimated data to CMS and to update it each quarter based on actual enrollment. CMS noted that there is insufficient information about the health status of enrollees in the BHP to make any adjustments for health status.

Separate equations will be used to calculate the premium tax credits and cost sharing reductions that beneficiaries would have received. For most beneficiaries, these amounts will be based on the cost of the second lowest priced silver plan. Because additional subsidies are required for American Indian and Alaska Native beneficiaries, their premiums and cost sharing will be based on the lowest cost bronze plan.

Self-only or family coverage. Rate cells will be developed for families of different sizes. The agency expects that one-adult and two-adult households will be most common because nearly all states provide either Medicaid or Children’s Health Insurance Program (CHIP) coverage to children with incomes up to 200 percent of FPL. Individuals who are eligible for Medicaid or CHIP are not eligible for the BHP.

FederalRegisterIssuances: FinalRules NewsFeed BenchmarkBenefitNews CostSharingNews EnrollmentNews EssentialBenefitNews FederalFMAPNews HealthInsuranceExchangeNews MedicaidNews PremiumTaxNews

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