CMS Issues Proposed Rule That Would Implement ACA’s Basic Health Plan In 2015

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule that would begin to implement another affordability program under the Patient Protection and Affordable Care Act (ACA). Under this option, the Basic Health Plan (BHP), states may contract with two or more issuers to sell qualified health plans to people who are not eligible for Medicaid with incomes up to 200 percent of the federal poverty level (FPL). The Department of Health and Human Services (HHS) proposes to begin coverage under BHPs as of Jan. 1, 2015. The proposed rule was published in the September 25 Federal Register.

Eligible enrollees. In addition to United States citizens with incomes between 133 percent and 200 percent of FPL, noncitizen residents who are lawfully present in the U.S. and whose incomes do not exceed 200 percent of FPL would be eligible to enroll in BHPs. Enrollment in a BHP would be accomplished with the same single, streamlined application and determination process used for Medicaid, the children’s health insurance program (CHIP), and the health insurance exchanges. The requirement to present documentation of their citizenship or lawful residence in the U.S. would apply to BHP enrollees as well.

BHP requirements. States that operate a BHP would have to do so statewide. They could not use waiting lists or enrollment caps, nor could they reduce the income limit below 200 percent of FPL. They would have to offer at least two qualified health plans (QHP) in every part of the state. The plans would be required to use managed care or similar controls to assure quality; fee-for-service plans would not be available. The plans offered through the BHP would provide minimum essential coverage and would be compared to the same benchmark plans as the plans sold through the exchanges. The premiums and cost sharing terms must be available to the public through both the Internet and other means for persons without Internet access.

Enrollee financial obligations. The BHP plans could not charge a premium higher than that of the second lowest silver plan. Beneficiaries could be disenrolled for failure to pay premiums, but the plan could not refuse to reenroll them at the next general or special enrollment period, nor could it require payment of the past due premiums as a condition of reenrollment. Enrollees with incomes up to 150 percent FPL could be required to pay cost sharing at the level of a platinum plan, while those with incomes between 150 percent and 200 percent FPL could be required to pay cost sharing at the level of a gold plan.

Federal payments to states. The federal government would pay states the funds that would have been available to BHP enrollees as advance payment of the tax credit for payment of premiums and as reduced cost sharing if they had bought insurance through the exchange. Payments would be made prospectively each quarter based on enrollment. States would be required to maintain the funds in a trust account and use them only to lower premiums or cost sharing or to increase benefits on the BHP.

HHS certification process. As with the exchanges, CMS must certify its approval of a state’s BHP. The states that choose to implement this program would have to submit a blueprint stating how the BHP would meet federal requirements. An open competitive bidding process would be required. The competitive process must address negotiation of premiums, cost sharing, innovative features, care coordination and care management for enrollees, especially those with chronic health conditions, adequacy of the provider network, and establishment and maintenance of provider patient relationships. The blueprint also must describe the financial controls, application and enrollment processes, and every other applicable requirement.

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