On September 25, 2013, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule to establish the Basic Health Program pursuant to Section 1331 of the Affordable Care Act (ACA). The Basic Health Program aims at assisting individuals whose incomes exceed the threshold for Medicaid and similar programs, but who cannot afford to purchase coverage in the ACA’s Health Insurance Marketplaces (i.e., .individuals who have income levels between 133 to 200 percent of the federal poverty level). States that establish a Basic Health Program will receive federal funding equal to 95 percent of the amount of the premium tax credits and the cost sharing reductions that would have otherwise been provided to (or on behalf of) eligible individuals if these individuals enrolled in Qualified Health Plans through the Marketplaces.

The proposed rule would (1) establish requirements for certification of state-submitted Basic Health Program Blueprints (i.e., the operational plans states must submit) and state administration of the Basic Health Program consistent with that Blueprint; (2) establish eligibility and enrollment requirements for standard health plan coverage offered through the Basic Health Program; (3) establish requirements for the benefits covered by the standard health plans participating in the Basic Health Program; (4) provide for federal funding of certified state Basic Health Programs; (5) establish the purposes for which states can use such federal funding; (6) set parameters for enrollee financial participation; and (7) establish requirements for state and federal administration and oversight of Basic Health Program funds. Key provisions of the proposed rule include:

• Basic Health Program Blueprint: States that establish a Basic Health Program must submit a Blueprint for certification to CMS. The Blueprint must comprehensively set forth the manner in which states will implement the Basic Health Program, which is similar to the process CMS utilizes to approve state-run Marketplaces.
• Eligibility and Enrollment: Government agencies must make eligibility determinations according to criteria utilized by the Internal Revenue Service to determine advance premium tax credits and cost sharing reductions. Moreover, states may use either a defined open enrollment period—like the Marketplaces—or a continuous open enrollment model—like Medicaid. States must utilize a single, streamlined application and must coordinate with other programs (e.g., Medicaid) to ensure affordability.
• Standard Health Plans: Plans offered in the Basic Health Program must provide at least the essential health benefits required under the ACA.
• Enrollee Financial Obligations: Monthly premiums may not exceed the monthly premium for the “silver plan” on the Marketplaces (i.e., the second lowest cost plan on the exchanges. The cost-sharing standards would be consistent with those required in the Marketplaces.
• State Basic Health Program Trust Funds: Trust funds for the receipt of federal funds would be established. The proposed rule would also set forth the established parameters for use of these funds.
• Oversight: The proposed rule would establish state and federal oversight of the Basic Health Program independent audits and annual reports, among other things.

Comments to the proposed rule are due by November 25.