Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Basic Health Plan Rules Under Final Administration Review

By Rebecca Adams, CQ HealthBeat Associate Editor

February 13, 2014 -- The Office of Management and Budget (OMB) is conducting its final review of a long-delayed rule that would allow states to create health insurance programs that are affordable and stable alternatives to marketplace coverage for low-income people.

A year ago, the Centers for Medicare and Medicaid Services announced that officials would delay the creation of the basic health program from 2014 to 2015.

The health care law (PL 111-148, PL 111-152) gives states the option of using federal funds to subsidize insurance coverage for low-income residents who would often qualify to buy coverage through a marketplace plan. The idea behind the program was to reduce the need for low-income consumers to change coverage if their income fluctuates between the thresholds that would qualify them for Medicaid and the marketplaces.

The basic health plan is intended to help those with incomes between the Medicaid-eligibility level of 139 percent of the federal poverty level and 200 percent of the federal poverty level.

The program may offer more affordable out-of-pocket costs for low-income people who enroll than they would face under the marketplace plans.

People who enroll in a state's basic health program also would not have to repay any extra subsidies that they should not have been entitled to receive. Consumers who enroll in marketplace plans do have to pay back any additional money that they should not have gotten when they file their taxes the next year.

States that decide to use this option would receive 95 percent of the amount of the premium tax credits and cost-sharing reductions that would have been provided in the exchange for this group of people.

The OMB is reviewing a final rule on the basic health program as well as a separate methodology. The OMB interagency review is often the last step before a rule is released, although the timing is unpredictable.

The final rule for the basic health program went to OMB for review on Feb. 7. The methodology notice was sent to the OMB analysts on Feb. 11.

The OMB also began looking over a different proposed rule on Feb. 11 that would establish standards for the marketplaces in 2015. That catchall rule is expected to include a range of issues. It appears to be on a slower timetable for release than the basic health program regulations.

Publication Details