Proposed 2016 Basic Health Program Notice Issued by CMS
CMS’ 2015 proposed rules are similar to those rolled out for 2014 with several small provisions.
- This week, the Centers for Medicare & Medicaid Services (CMS) issued a proposed notice establishing the methodology for determining federal funding for the Basic Health Program year 2016. The program allows states to establish a health benefits coverage program for lower-income individuals as an alternative to the Health Insurance Marketplace coverage that is offered under the Affordable Care Act. It is a voluntary program that enables states to create a benefits program for residents with incomes that are too high to qualify for Medicaid through Medicaid expansion but are in the lower income bracket to be eligible to purchase coverage through the Marketplace.
The benefits include at least the 10 essential health benefits specified in the Affordable Care Act and states can add benefits to their offerings. The monthly premiums and cost sharing charged to eligible individuals will not exceed what an eligible individual would paid if they were to receive coverage from a qualified health plan through the Marketplace.
This is the second year that the program has been in existence. On March 12, 2014 the final rule for the Basic Health Program was released. CMS established the standards for state and federal administration of the program, including provisions regarding eligibility and enrollment, benefits, cost-sharing requirements and oversight activities. Where possible, these rules were aligned with existing statutes to simplify administration for states and promote coordination between the Basic Health Program and other health insurance programs.
Any state that operates a Basic Health Program will receive federal funding equal to 95 percent of the amount of the premium tax credit and the cost sharing reductions that would have otherwise been provided to eligible individuals is they were enrolled in a qualified health plan through the Marketplace.
The final rule also specified that CMS will annually publish a proposed and final payment notice, recapping the program and making any needed changes. The proposal for the 2016 program will look similar to what was established for 2015. However, there will be several updates. These include:
• Proposed methodology calculates the monthly payment rates for each state for various rate cells, which include age, geographic area (county), income, household size and the number of persons in the household enrolled in the program.
• Adjustments to the American Indians and Alaska Native enrolled in the program.
• Calculates payments rates based on the premium tax credit amount and the cost-sharing reductions. Premium tax is calculated by estimating the average premium tax credit that person would have received for each cell.
• States have the option to use either the 2016 Marketplace premiums or the 2015 premiums projected forward by an estimated trend rate.
• States have the option to propose a methodology to calculate the difference between the Basic Health Program population and the persons enrolled in the individual Marketplace.
• The proposed methodology calculates payments quarterly. Payments will be based on the last quarter of enrollment and reconciled once enrollment data is submitted.
