By Rebecca Adams, CQ HealthBeat Associate Editor
March 7, 2014 -- The Centers for Medicare and Medicaid Services (CMS) released a rule and a payment bulletin late last week establishing the basic health program, which is intended to be an affordable and stable alternative to marketplace coverage for low-income people.
The program is scheduled to start on Jan. 1.
The final rule changed the requirements for providers. Some people who commented asked CMS officials to require that health plans be required to show that their provider networks not only have a sufficient number of providers, but also have a sufficient geographic distribution so that consumers in rural areas, for example, have sufficient access to providers. Regulators responded by clarifying that plans should follow Medicaid managed care rules or marketplace rules to make sure that the number, mix, and geographic distribution of medical providers will meet the needs of consumers in the area. The plans also will have to follow Medicaid or marketplace rules on the types of providers that the networks have to include, such as federally qualified health centers, pediatric primary care providers and other specialists.
The final version of the rule also clarifies that states must offer people a choice of plans from at least two standard health plans. States can request an exception to this requirement if the state does not have enough plans to allow that.
The final rule outlines how states need to get certified for the program, the eligibility criteria for individuals, the financing of the program and oversight of it. The rule says that consumers' premiums cannot be more than the monthly premiums that they would have paid under the second-cheapest silver-level plan in the marketplace.
A year ago, the Centers for Medicare and Medicaid Services announced that officials would delay the creation of the program from 2014 to 2015. The rule went to the Office of Management and Budget for review in early February.
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 qualify to buy coverage through a marketplace plan. The idea 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 program is designed to help those with incomes between the Medicaid-eligibility level of 138 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 were not entitled to receive.
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 newly-released version also allows states the option of enrolling people for 12 months continuously without having to reapply.
Regulators also said in the final rule that they will allow states to get more certainty by receiving an interim certification of their proposed blueprint if requested. If states want to start the basic health program in the middle of 2015, they can ask CMS to approve a plan to shift people who are already enrolled in marketplace plans to the basic health program.