Rules Released for Low-Income Insurance Option
Sept. 23—The U.S. Department of Health and Human Services (HHS) released proposed rules for a low-income health insurance option for states that was delayed until 2015.
The proposed rules, released late Friday, provided details for the Basic Health Program (BHP), through which states can offer subsidized coverage for residents from 138 percent to 200 percent of the poverty level.
The program aims to eliminate cost barriers for low-income residents who have difficulty affording even the federally subsidized health insurance plans sold through the insurance marketplaces that will begin to offer coverage Jan. 1, 2014. Specifically, BHP plan premiums cannot exceed premiums or cost sharing charges by the second lowest-cost silver marketplace plan—as reduced by federal subsidies.
HHS delayed the scheduled January 2014 launch of the BHP for a year due to its inability to promulgate the necessary rules in time. That delay could impact low-income residents of some states, which have discontinued their preexisting versions of the BHP due to its anticipated launch in 2014.
The new proposed rules required each state that wanted to launch a BHP to submit a "blueprint" for approval from HHS that would describe all of the features of the BHP, including the state’s plan for funding it, according to a fact sheet from the Centers for Medicare & Medicaid Services. The federal government will pay states 95 percent of the subsidies BHP participants would have received if they were enrolled in a standard marketplace plans.
Eight states have reportedly expressed interest to HHS in starting a BHP program.
States that opt to launch a BHP must incorporate enrollee eligibility decisions for it into the same system that determines eligibility for either Medicaid or marketplace plan subsidies, based on incomes.
The programs are supposed to use a competitive process to select plans from either insurers, HMOs, or a provider network. The programs must offer enrollees at least two health plans, although they may come from the same insurer. Alternately, states may form regional compacts and negotiate BHP contracts jointly with other states.
Publication Date: Monday, September 23, 2013