The Basic Health Program (BHP) is an optional coverage program under the Patient Protection and Affordable Care Act (ACA) that allows states to use federal tax subsidy dollars to offer subsidized coverage for individuals with incomes between 139-200% of the federal poverty level (FPL) who would otherwise be eligible to purchase coverage through state Health Insurance Exchanges. States can use the BHP to reduce the cost of health insurance coverage for these low-income consumers, a highly price-sensitive population with high rates of uninsurance. Depending on how it is designed, the BHP also can help consumers to maintain continuity among plans and providers as their income fluctuates above and below Medicaid levels.

A report, "The Role of the Basic Health Program in the Coverage Continuum: Opportunities, Risks and Considerations for States," co-authored by Manatt's Deborah Bachrach and Melinda Dutton, helps to provide a framework for states that are currently weighing whether to implement a BHP and highlights some of the questions and challenges associated with a BHP. Critical among these are how to design the BHP to enhance continuity of coverage as people move among Medicaid, the BHP, and coverage through qualified health plans (QHPs) in the Exchange; how to assess the BHP’s impact on the viability and effectiveness of state Exchanges; and how to estimate revenues and costs to evaluate the financial feasibility of the BHP. The report also offers strategies for states to manage and reduce the risks associated with the BHP.

Additional Authors:
Jennifer Tolbert (Kaiser Family Foundation)
Julia Harris (Kaiser Family Foundation)