Will Mass Set up a Basic Health Plan under ACA?

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The Connector held its annual retreat this past weekend, and since the omnipresent Health Care for All (HCFA) representatives were not in attendance to write up a summary, I thought I would provide an overview of what was discussed at the meeting, and outline some of the future challenges for the Connector. The agenda can be found here.

Basic Health Plan

The Connector is seriously thinking about offering a basic health plan, an option in the ACA, and is one of the few states in the nation to be doing so. (When the Connector posts the slides from Saturday, I will link to them for more detail on the different circumstances being modeled.)

With a BHP the federal government would pay a state 95% of the cost of tax credits and subsidies that they would have spent without a BHP. This may result in the feds covering 100% of the cost of running a BHP depending on how a state set up a program, and is a very different funding structure when compared to the current 50% FMAP reimbursement for CommCare or Medicaid.

There are lots of policy tradeoffs with a BHP. (I will write on this more in the future if the state decides to move forward with a BHP.) But just as an example, the BHP can be contracted out or run by the state. If state run, one can imagine Medicaid II, but without take-one take all rules. In other words, under current law, if a provider accepts one Medicaid patient, they can’t turn down any other because they are on Medicaid. This is the government’s “solution” to the historical practice of under reimbursing for the care of these patients. As a result of being underpaid, some doctors just decide to not accept any Medicaid patients.

The Massachusetts Medical Society has documented the challenge these folks are facing finding internists (only 53% accepting new patients) and family physicians (62%). I don’t believe the government imposed access rules hold for the BHP. In a future downturn, the state would cut BHP payments (they are doing it with Medicaid now), and these low-income patients would be caught between a rock and a hard place, as no provider will take them. They are functionally uninsured.

Finally, in a recent NEJM piece John Graves, Rick Curtis, and Jonathan Gruber (who sits on the Connector Board) predicts significant churning and increased instability of coverage for those on the edge of eligibility between a BHP and the exchange.

This blog post is part 4 of 4 from the Connector meeting.

Twitter @josharchambault

UPDATED: The Connector just posted the slides from Saturday.