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Basic Health Program could broaden available coverage options for the poor.
Under health reform, low-income people without coverage will receive federal subsidies to buy health insurance through exchanges. States that implement the Basic Health Program in addition to an exchange would contract with health plans or networks of doctors and hospitals to provide care to people with incomes up to 200% of the federal poverty level who don't qualify for publicly financed programs.
The Basic Health Program will replace subsidized coverage through exchanges for the lower-income population. Washington will pitch in by providing states with 95% of the tax credits and subsidies that would have otherwise been provided to the individuals to purchase coverage in the exchange.
According to an Urban Institute paper commissioned by the Association for Community Affiliated Plans, combined annual premiums and out-of-pocket costs for adults in the Basic Health Plan could drop from $1,650 to just under $200 if every state were to implement the Basic Health Program based on Medicaid and CHIP. The study estimates that 600,000 people who would otherwise forgo coverage in an exchange because it was too expensive would choose a plan in the Basic Health Program.
Some are concerned that the program could decrease the number of lives covered by the insurance exchange market, but such an impact would be comparatively modest. Urban estimates that the total population in exchanges would still reach 22 million. Universal implementation would represent a net increase in the number of people who could benefit from the care management and coordination of managed care.
MORE WORK TO BE DONE
The Department of Health and Human Services must provide states guidance on several issues that will affect how states develop their Basic Health Programs-especially clarification of the mechanisms for calculating and delivering federal funds. States must ensure that reimbursement levels for health plans and providers are high enough to attract an adequate number of participating physicians to meet demand for services generated by the program.
The Basic Health Program represents a terrific opportunity for health plans to demonstrate their added value in the context of health reform. Given the financial pressures felt in statehouses across the country and the professed desire by leaders on both sides of the aisle for affordable health options, the Basic Health Program deserves a long, close look. Governors, Medicaid directors and state legislatures across the country owe it to the people they serve to give the Basic Health Program serious consideration-as do those in the C-suite at health plans across the country.
Margaret Murray is the CEO of the Association for Community Affiliated Plans.