In This Issue:

1. Executive Summary

2. Disclaimer

3. Financial Feasibility of the BHP

4. Policy Options

5. Impact on the Exchange

6. Literature Review

7. Appendix 1 – Basic Health Plan Financial Feasibility Actuarial Analysis

Excerpt from Executive Summary

The Basic Health Program (BHP), as defined in the Patient Protection and Affordable Care Act (ACA), gives states the option to provide health insurance coverage to consumers with incomes between 138% (133% plus the 5% income disregard) and 200% FPL through a state administered program, supported with federal funds. The BHP creates a separate State operated health program in lieu of the Health Benefits Exchange1 (Exchange) for this low income population. Those eligible for the BHP will not be eligible for the Exchange. States opting for the BHP receive 95% of the federal funding that would have been expended on federal tax subsidies had the individual participated in the Exchange. In turn, the state must use the federal dollars to provide coverage at least as comprehensive and affordable as that provided through the Exchange.

The BHP is often described as providing an affordability bridge between public and private coverage. The BHP allows states to offer eligible individuals lower premium and cost sharing than what would be required in the Exchange. This has the potential to increase participation and reduce the number of uninsured residents.