CMS Proposes 2016 Basic Health Program Payment Plan

CMS in a proposed notice released Tuesday outlined its plan to reimburse states for the Affordable Care Act's Basic Health Program in 2016, Modern Healthcare reports.

A final notice will be issued February 2015 (Herman, Modern Healthcare, 10/21).

Background

The program, which is scheduled to launch in 2015, was designed for states to offer lower-cost health coverage options to residents with annual incomes that exceed the eligibility threshold for Medicaid, but who are unable to afford the health plans under the law's insurance exchanges. BHP plans will be available to individuals with annual incomes up to two times the federal poverty level, or about $47,000 for a family of four (California Healthline, 9/23/13).

CMS in March released the program's final rules. Under the rules, states that decide to offer BHP plans will receive 95% of the cost that the federal government would have incurred had BHP beneficiaries instead opted to use federal premium subsidies to purchase coverage via the state or federal health insurance exchanges. States' BHP plans must meet ACA's 10 essential health coverage benefits but can add more benefits (Modern Healthcare, 10/21).

CMS To Use Similar Payment Rules for 2015, 2016

CMS in the proposed notice said it will use the same payment methodology for 2016 as will be used for 2015.

According to Modern Healthcare, the methodology calculates payments based on several factors, including a consumer's:

• Age;
• Cost-sharing reduction;
• Location;
• Household size;
• Income; and
• Premium tax credits.

However, CMS in 2016 will allow states to propose separate payment models that factor in the assumed health differences between BHP enrollees and exchange enrollees. According to Modern Healthcare, the proposals must be approved by Dec. 31, 2015 (Modern Healthcare, 10/21).