The Affordable Care Act (ACA) aimed to expand health insurance coverage across the United States. A key, yet often overlooked, component of the ACA is the Basic Health Program (BHP). This initiative, established under Section 1331 of the ACA, offers states a unique opportunity to provide affordable health coverage to specific low-income residents. For individuals who might otherwise struggle to afford insurance through the Health Insurance Marketplace, the BHP serves as a crucial safety net.
What is the Basic Health Program?
The Basic Health Program is a state option designed to make health coverage more accessible and affordable for low-income individuals. It specifically targets residents who are not eligible for Medicaid or the Children’s Health Insurance Program (CHIP), but whose income levels are still modest enough to qualify for assistance. This program is particularly beneficial for those whose income fluctuates, sometimes placing them above and sometimes below the thresholds for Medicaid or CHIP eligibility. By offering a consistent coverage option, the BHP helps to ensure continuity of care, preventing gaps in health insurance for this vulnerable population.
Who is Eligible for the Basic Health Program?
Eligibility for the Basic Health Program is carefully defined to target those most in need of affordable health coverage. To be eligible, individuals must meet several criteria:
- Citizenship or Lawful Presence: They must be U.S. citizens or lawfully present non-citizens.
- Income Level: Their income must fall between 133 percent and 200 percent of the federal poverty level (FPL).
- Not Eligible for Medicaid, CHIP, or Minimum Essential Coverage: They cannot be eligible for Medicaid, CHIP, or other forms of minimum essential coverage.
- Specific Provision for Lawfully Present Non-Citizens: Lawfully present non-citizens with incomes below 133 percent of the FPL, who are ineligible for Medicaid due to their immigration status, are also eligible for BHP.
This targeted approach ensures that the Basic Health Program reaches individuals who are caught in the gap – earning too much for traditional safety net programs but not enough to comfortably afford marketplace insurance without significant financial strain.
What Health Benefits Does the BHP Include?
The Basic Health Program ensures comprehensive coverage for its enrollees. By law, BHP coverage must include at least the ten essential health benefits mandated by the Affordable Care Act. These essential health benefits encompass a broad range of healthcare services, including:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
This comprehensive benefits package ensures that individuals enrolled in the Basic Health Program have access to the essential medical care they need, promoting better health outcomes and financial security.
How is the Basic Health Program Funded?
A critical aspect of the Basic Health Program’s design is its federal funding mechanism. The federal government provides significant financial support to states that operate a BHP. Specifically, states receive federal funding equal to 95 percent of the premium tax credits and cost-sharing reductions that would have otherwise been provided to eligible individuals if they had enrolled in qualified health plans (QHPs) through the Health Insurance Marketplace.
This funding model makes the BHP financially viable for states, incentivizing them to establish these programs and expand affordable health coverage options within their borders. It allows states to offer lower premiums and reduced cost-sharing to enrollees, making healthcare genuinely affordable.
State Implementation of the Basic Health Program
While the Basic Health Program is a valuable option, its implementation rests with individual states. Currently, a few states have taken the lead in establishing BHPs, demonstrating the program’s feasibility and positive impact.
- Minnesota: Minnesota has been a pioneer in BHP implementation, operating its program since January 1, 2015. Their experience serves as a model for other states considering this option.
- Oregon: Oregon is the most recent state to adopt a BHP, receiving approval in June 2024 and launching its program in July 2024. This expansion indicates growing interest in the BHP as a solution for affordable coverage.
- New York: New York previously operated a Basic Health Program starting in April 2015, but suspended it in April 2024. While New York’s program is currently paused, their prior experience provides valuable lessons and insights into BHP operations.
Image alt text: Individuals reviewing application forms, representing the process of applying for the Basic Health Program under the Affordable Care Act.
Resources for Basic Health Program Implementation
For states interested in establishing a Basic Health Program, the federal government provides substantial guidance and resources. Key resources include:
- Basic Health Program Blueprint: This comprehensive form is essential for states seeking official certification for their BHP. It guides states in outlining their program design, operations, management, and compliance with federal regulations.
- Federal Guidance Documents: The Centers for Medicare & Medicaid Services (CMS) offers various guidance documents to support BHP implementation. These include:
- Rulemaking Notices: Proposed and final rules that align BHP regulations with existing rules for the Marketplace, Medicaid, and CHIP, promoting program coordination.
- Federal Funding Methodology: Documents detailing the methods used to calculate federal payments to states operating BHPs.
- State Report for Health Insurance Exchange Premiums: A reporting tool for states with State-Based Exchanges, used to determine federal BHP funding amounts.
- Basic Health Program Implementation Experiences Presentation: A presentation sharing insights from the early implementation experiences of New York and Minnesota, covering program administration, financing, target populations, and contracting strategies.
These resources are invaluable for states navigating the complexities of establishing and managing a successful Basic Health Program.
Conclusion
The Affordable Care Act’s Basic Health Program represents a significant opportunity for states to create innovative and effective solutions for providing affordable health coverage to their low-income residents. By understanding the program’s design, eligibility criteria, benefits, and funding mechanisms, states can leverage the BHP to strengthen their healthcare systems and improve the health and financial well-being of their communities. As more states explore and implement the Basic Health Program, its role in the landscape of affordable healthcare is likely to become increasingly important.
