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Briefing — Exploring the Financial Feasibility of a Basic Health Program in California

The Affordable Care Act allows states to create a Basic Health Program for legal residents with incomes up to 200% of FPL who are ineligible for Medicaid. This would be the first income group to receive subsidies through the Health Benefit Exchange.

The Affordable Care Act (ACA) offers states the option to create a Basic Health Program (BHP) to provide coverage to legal residents with incomes up to 200% of the federal poverty level (FPL) who are ineligible for Medicaid. This population represents the first income group that would receive subsidies through the state's Health Benefit Exchange, along with lawfully present immigrants with incomes up to 133% FPL. If the state were to create a BHP, enrollees would be ineligible to participate in the exchange.

The ACA requires BHP enrollees to receive the same essential benefits and the same or lower premiums and cost sharing that they would receive from an exchange plan. To finance it, states would receive 95% of the federal subsidies that enrollees would have received through the exchange. State BHPs would contract with managed care plans to deliver services. SB 703 would create a BHP in California, and the bill is now working its way through the Senate Appropriations Committee.

CHCF hosted a Sacramento briefing to answer fundamental questions about the financial feasibility of a BHP in California. The briefing, cosponsored with the Senate Health Committee, covered preliminary findings from a CHCF-commissioned Mercer actuarial model that estimates the affordability of a California BHP under several scenarios.

The presenters were:

  • Charles Bacchi, executive vice president, California Association of Health Plans
  • Richard Curtis, president, Institute for Health Policy Solutions
  • Len Finocchio, senior program officer, California Health Care Foundation
  • Senator Ed Hernandez, chair, Senate Health Committee
  • Elizabeth Landsberg, legislative advocate, Western Center on Law & Poverty
  • Branch McNeal, principal, Mercer
  • John Ramey, executive director, Local Health Plans of California

A video of the presentation, and the slides, are available below.