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You are here: Home / Anderson On Health Insurance / Basic Health Plans as a per-capita block grant

Basic Health Plans as a per-capita block grant

by David Anderson|  May 13, 20228:57 am| 6 Comments

This post is in: Anderson On Health Insurance

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The Affordable Care Act Section 1331 is the Basic Health Plan (BHP) option for states. The BHP is intended to replace ACA marketplace coverage for people earning between 138% to 200% Federal Poverty Level with a state based program. States get a per-capita block grant that is determined by what enrolled individuals in the BHP would have gotten from ACA subsidies. The per-enrollee grant is 95% of what the individual would have received if they had enrolled in an ACA plan. This saves the federal government a little bit of money on a per capita basis and shapes the policy space for states. The coverage has to be at least as affordable and at least as good as a benchmark silver plan with Cost-sharing reduction benefits applied.

As of now, only two states have elected to enact a BHP. New York was attracted to a BHP as it allows for the state to cover immigrants at much lower cost to the state than the previous coverage option of putting these individuals on 100% state funded Medicaid. Minnesota has an active BHP program as well.

Recently, two more states are aggressively looking into a BHP (via Politico):

Oregon and Kentucky, despite their wildly different politics, are pursuing an Obama-era policy that uses federal dollars to establish a health insurance plan for people who make too much money to qualify for their state’s Medicaid programs. The goal is to provide residents who find Obamacare plans too expensive a less costly option, while smoothing insurance gaps for people teetering on the edge of Medicaid eligibility…
In Oregon, Democrats passed a bill in March to establish a basic health program, the details of which are being ironed out by a task force that began meeting this week. In Kentucky, Republicans approved $4.5 million in state funds this spring to set up a basic health program, which was signed into law by the state’s Democratic governor. An estimated 85,000 Oregonians and at least 37,000 Kentuckians will be eligible to enroll in the plans as soon as next year.

This is an area of interest going forward as it is a significant devolution of policy autonomy to states within the framework of a per-enrollee block grant.

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Reader Interactions

6Comments

  1. 1.

    Ohio Mom

    May 13, 2022 at 9:39 am

    As someone heavily invested in seeing Medicaid (Ohio Son’s coverage) continue in its present form, I have a knee-jerk reaction to the term “Block Grant.” Alarms go off.

    But here we are for it? Does “per-capital” mean that the block grant’s amount is in proportion to the number of people who need coverage? Larger population, more money, smaller population less? My less than optimal understanding of block grants was that the amount was fixed and inflexible.

    Whatever, I like anything the covers more people.

  2. 2.

    BR

    May 13, 2022 at 10:02 am

    Slightly OT: why can’t the White House declare that free annual Covid boosters must be covered under insurance like annual flu shots? Doesn’t that guarantee a market so that pfizer and moderna will make enough? I remember that being something they can do under the ACA.

  3. 3.

    Ohio Mom

    May 13, 2022 at 11:59 am

    @BR: I think we need to develop an annual booster first. Right now boosters don’t have a set schedule.

    I timed my second for the upcoming super spreader event I’m going to (bar mitzvah in NJ county where Covid numbers are going up); I could have had it a couple of months ago. I recognize that my plan may or may not have data supporting it, it’s my version of a lucky rabbit’s foot,

    All that said, I agree, annual boosters when they are developed should be free. I am guessing someone is looking into a flu-Covid combo.

  4. 4.

    p.a.

    May 13, 2022 at 11:59 am

    My reaction too.  And VERY subject to negative state manipulation.

    @Ohio Mom:

    My less than optimal understanding of block grants was that the amount was fixed and inflexible. 

  5. 5.

    Ohio Mom

    May 13, 2022 at 2:28 pm

    Hmmm…usually David checks on the comments on his posts.

    I’m off to run more errands, I’ll check again later.

  6. 6.

    West of the Cascades

    May 13, 2022 at 2:57 pm

    Ah, Oregon – new state policy space to come up with an ACA-related song that Lisa Loeb can make fun of.

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