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Basic Health Plan: Taking a Slow Deep Breath and Thinking of Alternatives

In the last few weeks, I have received many concerned inquiries about the Basic Health Plan (BHP). For lack of a better definition, a Basic Health Plan is a hybrid, – not Medi-Cal, not Medicare, not commercial insurance – an option for states to cover individuals with incomes between 133% and 200% of FPL. Since we put out our last paper on BHPs,[i] much has changed, specifically SB 703 (Hernandez) did not come off the Assembly Appropriations Committee suspense file, and it is worth re-examining and thinking how the BHP alternatives could be redesigned for future consideration.

Several dynamics have a substantial affect on whether or not California chooses to create a BHP, and how it would be implemented. First, there is as yet no guidance, no draft or proposed rules from the federal Department of Health and Human Services about Basic Health Plans. Second, Healthy Families is being eliminated and shifted into Medi-Cal. Third, there is as yet no guidance from the state and a great deal of uncertainty exists around the evolution of Medi-Cal. Fourth, the Medi-Cal program continues to be the target of state budget cutters. Fifth, the Exchange Board has begun to flesh out the criteria for Qualified Health Plans’ participation. Lastly, the Governor has expressed his intent to call a special session on implementation of the Affordable Care Act in early January.[ii] I think California has its hands full implementing the Exchange and Medi-Cal expansion and with all due respect to those supporters of the BHP, we need to look at BHP alternatives during the interim.

The full report is available for download:

[i] See Wulsin, Thoughts on the Basic Health Plan Option (ITUP, May 2, 2012) at http://itup.org/insurance-exchange/2012/05/02/itups-thoughts-on-the-basic-health-plan-option/

[ii] Letter from Governor Edmund Brown to Speaker Perez and Senate President Pro Tem Steinberg (August 16, 2012).

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