A basic tenet of the Affordable Care Act (ACA) is to expand coverage and accessibility of health insurance to most, if not all, Americans. Coverage is expected to increase by up to 32 million people through expanding Medicaid and offering premium and cost-sharing subsidies to make insurance more affordable for those who do not qualify for Medicaid. In addition to these programs, states will also have the option of implementing a Basic Health Plan (BHP). If states choose to operate a BHP, they will be given 95 percent of what the government would have spent on subsidies for the enrolled population between 133 and 200 percent of the federal poverty line (FPL).
What is a BHP?
Beginning on January 1, 2014, states have the option to offer a BHP to their residents in lieu of individuals receiving federal subsidies. The BHP will have to meet certain criteria:
- Essential health benefits must be covered;
- Premiums must not exceed those of silver-level plans (the second lowest) on the Exchange;
- Certain actuarial minimums must be met; and
- Medical loss ratios may not fall below 85 percent.
The requirements mentioned above are the minimum requirements; states are allowed to offer more generous coverage (examples include that of Medicaid or State Children’s Health Insurance Plans (CHIP)). The Center for Medicare and Medicaid Services (CMS) released a request for information (RFI) on September 1 in an attempt to gather information that may assist in the development of the BHP regulations. If states decide to offer a BHP, they may contract with one or more private insurers or build on existing state-run programs like Medicaid and CHIP. If North Carolina decided to implement a BHP, BCBSNC will need to evaluate how we can best serve that population and our current members.
The BHP in ACA was modeled after a similar program that began in Washington State. The Washington BHP (WBHP) began in 1987 and differs slightly from the federal program. In WBHP, subsidies are distributed to help low-income residents afford insurance premiums. Both residents and the state participate financially and the program is run more like an insurance program than an entitlement program. In November of 2011, Gov. Gregoire of Washington recommended eliminating the WBHP because of a state budget shortfall and the high cost of the program.
Eligibility
To determine eligibility for the ACA-prescribed BHP, an individual must:
- Be younger than age 65 at the beginning of the plan year;
- Have a modified adjusted gross income (MAGI) of above 133 percent but below 200 percent of the federal poverty line (meaning, in 2011, an individual with an income from $14,484 to $21,780);
- Be a legal resident immigrant who has lived in the United States for less than five years whose income falls below 133 percent, but whose immigration status prevents them from being eligible for Medicaid; or
- Not have access to affordable, comprehensive employer-sponsored coverage.
If a state accepts the federal funds to operate a BHP, these individuals will no longer be eligible to shop on the Exchange and receive subsidies.
For more information on health insurance coverage in North Carolina, please visit our website at www.nchealthplans.com or call our toll free number 888-765-5400 and speak with one of our professional agents. Our agency provides coverage for health insurance in North Carolina through Blue Cross Blue Shield of North Carolina (BCBSNC). You may qualify for a 15% healthy lifestyle discount if you are in excellent health. Call us for details.
The information in this article was taken from Nchealthreform.com on 1/13/2012.
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exchange will be able to accommodate them when enrollment under President Barack Obama’s healthcare reform begins on October 1.
