CMS' Basic Health Plan Called into Question

The Basic Health Plan (BHP) may have counterproductive results.

The Basic Health Plan (BHP), a rule proposed by the Centers for Medicare & Medicaid Services (CMS), was created to help low-income individuals who are just over the Medicaid eligibility limit obtain affordable health plans. It was also implemented to cover beneficiaries whose Medicaid eligibility status fluctuates due to variations in their income (also known as “churning”). While CMS saw BHPs as a way to control costs and drive value-based care, the plan seems to have counterproductive results.

“Under the proposed rule, each state that intends to implement a BHP must submit a ‘Basic Health Program blueprint,’ following the model of the blueprints that states have submitted for operating their own exchanges,” writes Timothy Jost, a member of the Institute of Medicine. “The blueprint must describe all of the essential features of the BHP, including the state’s funding plan. It must be signed by the state’s governor, or the governor’s designee, and must be submitted only after the state has consulted with relevant stakeholders and received public comments.”

So far, Minnesota is the only state to implement a BHP-like plan, and The Minnesota Medical Association and Minnesota Hospital Association say the formula is deficient. State officials say the rule threatens sustainability of MinnesotaCare, Minnesota’s publically subsidized healthcare program. In comments sent to CMS, state officials wrote that “In effect, this methodology misaligns incentives so that a state like Minnesota gets punished for leading the nation in healthcare reform.”

BHPs, which were initiated as part of the Affordable Care Act, were slated for statewide implementation in 2014, but that deadline has been pushed to 2015. Due to the delay, no official guidelines have been written and some states fear the delay may reach into 2016.

“We all thought we were going to be able to start in 2014, and then we waited for the rules, and we waited and waited and waited,” said Janet Varon, who will help develop the BHP in Washington state when the rules are finally written.

Around the Web

CMS' Proposed Payment Initiative Could Derail Lower-Cost Insurance Program, Officials and Insurers Warn [Modern Healthcare]

Implementing Health Reform: The Basic Health Plan Proposed Rule [Health Affairs]

Affording the Affordable Care Act [Stateline]