government

Few states take up ACA basic health coverage option

The Basic Health Program, designed for patients at the edge of Medicaid eligibility, offers both financial risks and benefits to states, a new report concludes.

By Jennifer Lubell — Posted Nov. 30, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

An Affordable Care Act coverage option for low-income populations has caught the attention of only three states, according to a Robert Wood Johnson Foundation report published online in Health Affairs on Nov. 15. Many states want more direction from the federal government before establishing a Basic Health Program as authorized by the statute, the report says.

Such programs are designed to capture beneficiaries who are expected to migrate back and forth, a phenomenon known as churn, between Medicaid and the upcoming health insurance exchange plans as their income levels change. It specifically would offer public coverage to individuals who don’t qualify for Medicaid but whose incomes fall below 200% of the federal poverty level, which in 2012 is about $46,000 for a family of four. Starting in 2014, states that choose to take up the full ACA Medicaid expansion provision will offer coverage to everyone up to an effective rate of 138% of poverty.

Several analyses highlighted in the Health Affairs report suggest that a Basic Health Program could help mitigate the churning effect among lower-income populations.

Setting up such a program and administering it in conjunction with a Medicaid program could help eliminate churn between exchange and Medicaid plans for those below 200% of the federal poverty level, according to one Urban Institute study. To promote continuity of care, Basic Health Programs are expected to adopt benefit design and payment structures similar to Medicaid.

But the voluntary program has yet to gain much interest among states. Some are deciding whether to expand their Medicaid programs first before contemplating a Basic Health Program, and others want more specific details about the program, the report said (link).

Just a handful have done studies or approved legislation calling for an analysis of this option, and only three are taking legislative measures to put such a program in place. Washington, for example, already operates a program of this type and passed a bill to ensure that its model complied with the terms of the federal health system reform law. California plans to enact enabling legislation in December or January 2013, according to the {i}Health Affairs{i} report.

The third state, Massachusetts, approved legislation but is awaiting federal guidance on the Basic Health Program, said Alec Loftus, communications director with the Massachusetts Executive Office of Health and Human Services. The state has worked closely with its partners on the state’s health insurance exchange and with the Centers for Medicare & Medicaid Services “to ensure that Massachusetts provides accessible, affordable coverage to low-income adults as defined by the ACA,” he said.

In Massachusetts, the Basic Health Plan essentially is geared toward households earning up to 200% of poverty that otherwise would go into the state’s exchange to purchase qualified health plans with federal tax credits, said Jon Kingsdale, PhD, managing director of the Boston office of Wakely Consulting Group, a health care strategy and actuarial consulting firm. The rationale is that the state could cover these populations for a lower cost by imposing reduced fees on participating physicians and hospitals, while providing extra benefits and lower premiums to beneficiaries, he said.

These programs have the potential to save money by decreasing the numbers of uninsured, but states also could face additional costs if federal funds don’t end up covering the spending for the program, the report stated.

To pay for this basic option, states could draw down 95% of the estimated federal funds that would have gone toward subsidizing the purchase of private insurance by those enrollees through the exchanges. “The federal government is supposed to make a determination before the fiscal year begins about how much money it should give the state, based on projected enrollment and other factors,” the report stated.

But states face uncertainties about how the federal government will calculate this figure, Kingsdale said. “If it turns out that the way they calculate it does not reach what the state spends in the Basic Health Program, the state is at financial risk for that.”

Back to top


ADVERTISEMENT

ADVERTISE HERE


Featured
Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story


Read story

Goodbye

American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story


Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story


Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story


Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story


Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story


Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story


Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story