DHHS Paying Back to States Implementing Basic Health Programs

The Department of Health and Human Services (DHHS) is due to pay New York and Minnesota nearly half a billion dollars this year for their provision of state-administered health coverage. The ACA has a seldom-publicized provision that allows states to provide Basic Health Programs (BHP) to low-income residents as an alternative to ACA marketplace access. Only New York and Minnesota have taken advantage of this option to date.

BHP is designed specifically for people whose income is 138% – 200% of the Federal Poverty Line, the tier just above Medicaid expansion. Rather than buying insurance through the ACA marketplace, qualified participants in these states can simply get their care through BHP-participating clinics and providers. The BHP is also notable in that it is available to qualified citizens and “lawfully present non-citizens … whose immigration status disqualifies them from federally-funded Medicaid”, according to the Kaiser Family Foundation (KFF).

Participants pay between $0 and $80 per month (depending on income) and maximum out-of-pocket costs are very low. KFF, in its 2016 analysis of the new system, notes that “states implementing BHP receive 95% of what the federal government would have spent on subsidies if BHP enrollees had received market-place coverage.”

The Washington Post reports that the “system worked fine for both states until the Trump administration last fall eliminated CSRs [the cost-sharing reductions the government promised insurance companies], thus reducing the amount of federal funding those states received to cover people in their Basic Health Programs.” Minnesota and New York filed a case last January against DHHS for this loss of funding that was settled in May. After making interim payments of $151 million to New York and $17.2 million to Minnesota, DHHS quietly announced on August 24 that it will pay “$422,206,235 to New York and $46,276,090 to Minnesota for the first three quarters of 2018.”

Uninsured Rates Declining

Bloomberg reports that the number of uninsured Americans dropped from 48.6 million in 2010 (when the ACA was signed) to 28.3 million as of March, 2018, according to CDC data. The improvement, however, is geographically uneven, with the “south central states — Arkansas, Louisiana, Oklahoma and Texas — showing almost a quarter of adults lacking health care coverage.” Among all Americans, one in eight between the ages of 18 and 64 are still uninsured.

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