CMS Releases Proposed Rule for ACA’s Basic Health Program

Last week, CMS released a proposed rule outlining various requirements for the Affordable Care Act's Basic Health Program, which is scheduled to be implemented in 2015, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 9/20).

Background

The program was designed for states to offer lower-cost health coverage options to residents with annual incomes that exceed the eligibility threshold for Medicaid, but are unable to afford the health plans in the law's insurance exchanges (Adams, CQ HealthBeat, 9/20). The BHP plans would be available to individuals with annual incomes up to two times the federal poverty level, or about $47,000 for a family of four.

In February, the Obama administration announced that implementation of the BHP will be delayed until Jan. 1, 2015 -- one year later than scheduled in the ACA -- because HHS did not have enough time to issue the guidelines necessary to launch the program in January 2014 (California Healthline, 2/7).

Details of Proposed Rule

According to CQ HealthBeat, the proposed rule offers a framework for states to ensure that their standard health plans under the BHP meet eligibility, enrollment and benefit requirements as required by ACA. In addition, the proposed rule guides states on how they can use federal funding for their basic health plan and how consumers' payments should be handled (CQ HealthBeat, 9/20).

States would have the option to operate their plans under an annual open-enrollment model -- similar to the model being used for the exchanges next month -- or a continuous open model used in Medicaid, Modern Healthcare reports.

Further, monthly premiums of the program's plans cannot exceed the premiums that an individual would pay for the second lowest-cost silver plan in the ACA's exchanges. It also establishes the same cost-sharing standards used in the online marketplaces and bans cost-sharing for preventive services (Zigmond, Modern Healthcare, 9/20).

According to a CMS fact sheet, states will have an opportunity to comment on the payment notice -- which the agency will release that outlines the payment methodology for the BHP -- before the final methodology is released and applied to state data to determine the amount in federal funding that states will receive. The fact sheet does not indicate specific timelines for these actions (CMS fact sheet, 9/20).