The ACA’s Basic Health Program Option: Federal Requirements and State Trade-Offs
Report
The Patient Protection and Affordable Care Act (ACA) gives states the option to implement a Basic Health Program (BHP) that covers low-income residents through state-contracting plans outside the health insurance marketplace, rather than qualified health plans (QHPs). In March 2014, the Centers for Medicare & Medicaid Services (CMS) issued final regulations on the requirements for a BHP and the methodology for calculating federal payments to states. States can choose to implement BHP beginning in 2015. This report summarizes these federal policies, including the requirements for BHP as well as the methodology for determining federal BHP payments. It then analyzes the key trade-offs facing states as they decide whether and, if so, how to implement BHP, with a particular focus on the impact of BHP on state budgets and the size, stability, and risk level of state marketplaces.