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Federal Officials Release Proposed Rule for Basic Health Program

By Rebecca Adams, CQ HealthBeat Associate Editor

September 20, 2013 -- A new coverage option known as the basic health program would take effect on Jan. 1, 2015, under a proposed rule released Friday by the Centers for Medicare and Medicaid Services (CMS).

CMS had announced months ago that they would delay the program until 2015. The delay had been explained in a "frequently asked questions" document.

The program, which provides federal tax subsidies for low-income people whose income is too high to qualify for Medicaid, is an alternative to offering that population coverage in the exchanges that will begin operating in January 2014 under the health care law (PL 111-148, PL 111-152). It is intended to help those with incomes between 138 percent and 200 percent of the federal poverty level.

Federal officials have an incentive to encourage use of that plan because it pays 95 percent of what an individual would get in the form of a subsidy if they went to get coverage through the new marketplaces. Some consumer advocates like it because they think the plan would make coverage less pricey by offering lower cost-sharing. Another bonus for consumers is that individuals who miscalculate the amount of their incomes or see their salaries rise over the year won't have to pay federal officials back any extra tax subsidies that they should not have been entitled to get.

The proposed rule lays out the procedures for certifying a state's plan for a Basic Health Program. The proposal outlines eligibility, enrollment and benefit requirements for standard health plan coverage offered through the program. CMS officials also explained how states can use federal funding for it and what the guidelines for consumers' payments should be.

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