Under the Affordable Care Act, individuals between 133 and 400% of the federal poverty level would be eligible to purchase subsidized insurance coverage in the Exchange. The subsidies available through the Exchange will be available on a sliding scale, and individuals with the lowest income will be eligible for the largest subsidies; but some advocates are concerned that even with the richest subsidies, insurance might remain out of reach, or have too much cost-sharing, for those on the lowest end of the income scale.
The Basic Health Program is intended to be a different source of coverage from the Exchange for individuals from 133%-200% FPL. If the state were to create a BHP, everyone between 133-200% FPL would have to participate in that program and would not be allowed to buy coverage in the Exchange. The Federal Government would allocate 95% of the dollars they would have provided in subsidies to these individuals and give it to the State to run the BHP. The charge of the BHP would be to provide better care for less money.
The data presented at the briefing intended to answer the question of whether this charge is feasible. And to skip directly to the punch line, the consultants believe the answer to be “yes.” However, the discussion that followed the presentation of the data would indicate that actually, it’s complicated. Advocates and expert panelists questioned whether the assumptions that the data were based upon were reliable enough on to build public policy on, most notably because we don’t know exactly what commercial because the health status of potential enrollees was not factored in. Additionally both panelists and audience members raised a number of concerns. Below is a summary of those concerns in a “Pros vs. Cons” list, acknowledging that most of these things are projections and concerns and none of them are guaranteed to come to pass.
Could provide more affordable care to low-income Californians–either better benefits, or less cost-sharing.
Could save the state money in some specific instances.
Provides one of the few opportunities to get federal funding to cover legal immigrants.
Could improve the risk mix of the Exchange.
Could spare low income individuals the ordeal of tax reconciliation, or having to pay back the federal government for subsidies if their income changes.
Could make it easier for individuals to transition between Medi-Cal and BHP as their income changes if appropriate eligibility, enrollment, and retention processes are put in place and if the program is housed at DHCS.
Could harm the Exchange by reducing the purchasing power by up to half and making the Exchange less than 25% of the individual market.
Could harm the risk mix of the Exchange, and thus could increase premiums in the Exchange.
Could divert crucial attention that is needed in setting up the Exchange.
Could further weaken the Medi-Cal provider network by drawing providers away from Medi-Cal into the better paying BHP.
Could leave the state on the hook to pay for program costs exceeding federal funds.
Could make it more difficult to remain seamlessly covered as individuals’ income increases and they become eligible for the Exchange.
Pat Powers, Interim Administrative Officer of the Exchange spoke up to urge lawmakers to proceed with caution considering all the unknown variables.