The public exchanges are giving commercial carriers a chance to sell subsidized qualified health plan coverage to moderate-income consumers.
Now the Obama administration is working on rules that could help some states create major new nonprofit competitors, as well.
The Centers for Medicare & Medicaid Services is getting ready to publish the rules – proposed funding methods for a "Basic Health Program" program – in the Federal Register next week.
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The Patient and Protection and Affordable Care Act lets people with incomes from 133 percent to 200 percent of the federal poverty level use new tax credits to pay for coverage bought through the exchanges.
Consumer groups that thought the commercial exchange plan system would be too expensive persuaded Congress to put a basic plan system provision in PPACA, in Section 1331.
PPACA Section 1331 lets states set up health insurance programs for residents with household incomes between 133 percent and 200 percent of the federal poverty level who aren't eligible for Medicaid, the Children's Health Insurance Program or employer-sponsored health coverage.
A state with a basic plan system could either run its own basic plan plans, or it could hire outside companies, such as WellPoint Inc. or UnitedHealth Group Inc., to run the plans, just as many states now hire commercial carriers to run their Medicaid plans
A state with a basic plan system could collect premium payments from the insureds, while receiving cash from the U.S. Department of Health and Human Services. The amount would be based on the tax credits the basic plan enrollees would have received if they had signed up for commercial exchange plan coverage rather than signing up for coverage from a state-run basic plan.
The new proposal talks about the rules CMS might use when calculating how much funding states would receive for its basic plan system.
CMS failed to set up the basic plan system in 2014. Some said CMS waited on developing the basic plan system because it was afraid starting the system in 2014 would have frightened insurers away from selling commercial plans through the exchanges.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
