Understanding the Basic Health Plan under the Health Insurance Exchanges

Patient Protection and Affordable Care Act (PPACA) in its health reform ruling granted the U.S. States an option to provide insurance cover through the state health insurance exchanges, to the poor people who may be rendered ineligible for participating in the Medicaid. Categorized as the Basic Health Plan (BHP), would particularly cater to section of people that are not eligible for Medicaid and Medicare and satisfy other Basic Health Plan eligibility criteria.

The ACA has listed a number of eligibility criteria that need to be fulfilled for a candidate to be considered suitable for the Basic Health Plan. Some of these criteria are:

A) The individual should not be eligible for Medicaid

B) The candidate should be under-65 years of age and therefore ineligible for Medicare

C) The income of eligible candidates should fall between the 133%-200% of the Federal Poverty Level (FPL) income band, or the candidate is a legal foreigner with an income below 133% of the FPL level

D) If despite having an access to the employer-sponsored insurance, the plan does not provide minimum essential health coverage, as required by the ACA mandate or the plan is unaffordable (based on employee’s income) for the candidate.

Moreover, if any state implements Basic Health Plans in its health insurance exchange setup, then this group of individuals would be considered ineligible to receive federal health exchange subsidies. Instead, States would cover these individuals through coalitions with health plans and states.

Candidates enrolled in the health insurance exchanges through this program would therefore receive the minimum essential health coverage and would be charged only for the amount that they would have paid in the state health insurance exchange. Premium amounts for these plans cannot exceed the premium amount of the second lowest-cost silver tier plan offered in a health insurance exchange.