Health Center Regulatory Issues

HHS Issues Proposed Rule on Basic Health Plan


On September 23, 2013, the Department of Health and Human Services (HHS) released a proposed rule establishing the Basic Health Program (BHP), as required by section 1331 of the Affordable Care Act (ACA).  The BHP is intended to give states the flexibility to establish a health benefits coverage program for low-income individuals who would otherwise be eligible to purchase coverage on the Health Insurance Marketplaces (Exchanges). Ideally, the BHP enables states to reduce costs in a health plan for low-income consumers who are particularly price conscious. Additionally, the BHP could improve continuity in coverage for individuals who are likely to churn in-and-out of Medicaid eligibility because of fluctuations in income. The BHP was supposed to be implemented in January of 2014. However, HHS announced in February of 2013 that the BHP would be delayed until 2015, raising the ire of members of Congress who advocated for the program like Senator Maria Cantwell. Comments on the proposed rule are due no later than November 25, 2013.


The BHP is supposed to complement and coordinate with enrollment in the Exchange as well as in Medicaid and the Children’s Health Insurance Program (CHIP). As a result, when possible, the rule aligns BHP provisions with existing rules governing the Exchanges, Medicaid, or CHIP. In some circumstances, states are given the flexibility to choose between Exchange rules or those governing Medicaid and CHIP. In those instances, states must adopt all of the standards in the referenced Medicaid or Exchange regulations. The proposed rule details other aspects of the BHP, including: certification of state BHP Blueprints, eligibility and enrollment requirements, participation of standard health plans, benefit design, federal funding, and federal oversight. With regard to eligibility, individuals can participate in BHP if they are residents of the state; not eligible for Medicaid coverage that meets the standards of the essential health benefits; have household income between 138% and 200% of federal poverty level; are under age 65; either a citizen or lawfully present non-citizen; and not incarcerated. States are not allowed to impose additional eligibility requirements on individuals nor place enrollment limits on the BHP.


The proposed rule impacts health centers in several ways. Perhaps most importantly, the proposed rule does not make clear that standard health plans in the BHP must contract with health centers to cover the full range of health center services. This seems inconsistent with both the spirit of coordination envisioned by the BHP, and statutory language that requires standard health plans in the BHP cover “at least the essential health benefits.” (PPACA 1331(a)(2)(B)). For a BHP standard health plan to be properly aligned with Exchange and Medicaid requirements, plans should be encouraged to comply with network adequacy standards and to contract with safety net providers for the full scope of benefits covered by Medicaid, including health center services. Additionally, the proposed rule does not specifically require application assistance be designed for individuals with limited English proficiency. This is problematic because the BHP could be implemented to cover noncitizens who do not qualify for Medicaid because of immigration requirements. Given that CMS has not yet finalized this rule, health centers still have an opportunity to encourage HHS to improve on the proposed implementation of the BHP through comments.