2nd State Goes “Basic” with Health Plans

chalkboard%20health%20insuranceThe Affordable Care Act passed  on March 23, 2010, however not all sections of the law are in place across all 50 states. One such provision of the law is Section 1331, the Basic Health Program. This is an optional program for states that wish to offer even more affordable health coverage to uninsured Americans. All states offer metal plans (Platinum, Gold, Silver, and Bronze products) through the Health Insurance Marketplace. Since 2014, consumers have received financial help to defray the cost of monthly premiums and deductibles and copayments if they met specific income levels.

For example: In 2015, 70% of consumers can find a health plan lower than $75 a month after financial help. 80% can find a health plan for $100 a month. – HHS

However, despite financial help, many consumers still have found health coverage too expensive and deductibles still too high. The optional Basic Health Program aims to lower monthly premiums, deductibles, and copayments even further for low-income consumers by replacing certain metal plans with more affordable “Medicaid-like” health plans. This program specifically targets people earning too much for Medicaid, 138% of the federal poverty level ($16,242 per year for an individual) but less than 200% of the federal poverty level ($23,540 per year for an individual). Additionally, legal residents with incomes below the Medicaid eligibility level but do not meet the five-year lawful residency requirement for Medicaid are also eligible for the Basic Health. All consumers must be under 65 years of age. This specific population tends to have high rates of  being uninsured  based on recent studies.

How Does It Work?

  • States that would like to launch this program must first send in a blueprint outlining a plan of operations and seek approval from the Federal Government.
  • Upon approval, states can then contract with health plans to offer this coverage through the Health Insurance Marketplaces.
  • All Basic Health Program plans must offer the same essential health benefits as the metal plans being sold.
  • Monthly premiums and deductibles/copayments must not exceed what a consumer would have purchased has the Basic Health Program not existed.
  • To fund the program, states will receive 95% of all the money that would have provided financial help to consumers purchasing metal plans.
  • If the money received by each state is more than the money needed, the states must use the extra money to further cut monthly premiums and deductible/copayments.

Who’s Participating in 2016?

Minnesota: MN launched MinnesotaCare, their state-based Basic Health Plan in 2015. There was positive support for launching the program during 2014. Native American tribal groups advocated for removing copayments and deductibles for their constituencies and other organizations urged Minnesota to make sure an adequate number of health insurance companies take part in the program.

  • Household Income: Roughly 14% of households in MN earn incomes eligible for MinnesotaCare
  • Enrollment: MinnesotaCare has enrolled 108,290 people as of October 2015.
  • Uninsured Rate: Only 6% of the state lacks insurance, 5th lowest rate in the nation.

New York: Implemented with a phased-in approach, the Essential Plan, New York’s Basic Health Plan, folded in many of the Medicaid members ineligible for Federally funded Medicaid due to residency requirements in April of this year. Essential Plan eligibility will increase up to 200% of the Federal Poverty Level in January 2016.  Public comments from NY organizations were overwhelming positive. Many praised the efforts to increase affordability and many stakeholders asked NY to opt for continuous enrollment versus using an annual open enrollment period similar to Medicare or enrolling into metal plans.

  • Household Income: Roughly 20% of households in NY earn income eligible for the Essential Plan Program.
  • Enrollment: The Urban Institute forecasted that 468,000 people would enroll in the Essential Plan Program in 2016.
  • Uninsured Rate: Roughly 10% of NY lacks insurance leading the national average.

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