TOPIC: FEDERAL BASIC HEALTH PLAN OPTION GOAL: Understand the benefits of Federal Basic Health Plan adoption in Washington State. PROBLEM STATEMENT: Over 800,000 Washington residents are uninsured. With the Affordable Care Act, roughly 330,000 individuals have incomes below 138% of the federal poverty level (FPL) and will be newly eligible for Medicaid. Another 470,000 will qualify to receive subsidies to purchase health insurance through the Washington Health Benefit Exchange. However, there is concern that premiums on the Exchange will be too high and families with incomes up to 200% FPL will be unable to afford insurance even with subsidies. These low‐income families may forgo insurance and be required to pay the tax penalty. Without insurance, people are less likely to seek medical care, both necessary and preventive care. When they do, they are usually sicker and less likely to follow through with treatment plans because of cost. The Affordable Care Act offers states the option to adopt the Federal Basic Health Plan (FBHP), which is modeled after Washington State’s very own Basic Health Plan. The FBHP would cover individuals and families with incomes between 138% and 200% of the federal poverty level (FPL) and also low‐income immigrants who are not eligible for Medicaid because they have not resided in the U.S. for more than five years or their particular status is excluded from Medicaid. If a state adopts the FBHP, eligible individuals would participate in this plan instead of the Exchange. They would not receive premium tax credits or cost‐sharing assistance from the federal government. Instead, the state would receive 95% of what the federal government would have spent on tax credits and subsidies for eligible individuals. The premise is that the state would use its purchasing power to negotiate for health plan coverage and use available funds that remain to reduce premiums and cost‐sharing and provide additional benefits. FBHP premiums must be no greater than the subsidized Exchange premiums at the same income levels. VALUES STATEMENT: According to the Urban Institute, if adopted, more than 160,000 Washingtonians would be eligible for the FBHP. With lower premiums than the Exchange, families with incomes between 138% and 200% FPL will be more likely to buy insurance and remain insured, thereby reducing the uninsured population in Washington State. Without the FBHP, low‐wage workers will either forgo insurance or turn to the Exchange to purchase low monthly premium plans. Those plans, however, have very high out‐of‐pocket costs, which can deter individuals from seeking much‐needed medical care. The FBHP would benefit individuals whose incomes fluctuate between being Medicaid‐eligible and Exchange‐eligible, such as part‐time workers or self‐employed individuals with unpredictable and/or sporadic work. The FBHP would offer a smoother transition from Medicaid coverage and keep premiums affordable so individuals can continue being insured. Furthermore, FBHP and Medicaid can align their plans and providers so that individuals who jump between FBHP and Medicaid can see the same doctors and receive continuity of care. EXISTING EFFORTS: Proposed federal regulations regarding eligibility and enrollment, benefits, performance standards for state FBHP programs, and premium and cost‐sharing for consumers are expected to be finalized in March 2014. Washington State Health Care Authority and affordable health care coverage advocates, such as members of the Healthy Washington Coalition, submitted comments to the Centers for Medicare and Medicaid Services (CMS) on the proposed regulations. States may submit FBHP plans and receive decisions from CMS by August 2014 and begin operating as early as January 1, 2015. POTENTIAL PSE STRATEGIES: Opportunities may exist to:  Stay informed about FBHP activities and efforts. RESOURCES: Health Policy Brief: Basic Health Program – Health Affairs (November 2012) The Basic Health Program Option under Federal Health Reform: Issues for Consumer and States – Stan Dorn (March 2011) Basic Health Program Proposed Rule (September 2013) The ACA Basic Health Program in Washington State – The Urban Institute (August 2012)