In 2014, the Affordable Care Act (ACA) will significantly expand coverage options for uninsured, low-income Californians. Families with incomes between 138% and 200% of the federal poverty level (FPL) (about $29,000 to $44,000 for a family of four) earn too much to qualify for Medi-Cal. Instead, the federal law provides tax credits to help those in this income range afford commercial coverage through the California Health Benefit Exchange.
The ACA also offers states an alternative option: to create a Basic Health Program (BHP). If the state creates a BHP, people earning below 200% of FPL would be ineligible to participate in the exchange.
A report by Mercer, supported by CHCF, addresses the financial impact that the BHP option would have on California's general fund if it were implemented at existing Medi-Cal managed care payment rates. The analysis finds California may be able to implement a BHP at no cost to the general fund (that is, entirely funded by federal subsidies). The report estimates:
- The average 2014 federal BHP monthly subsidy to be between $441 and $497 per member
- The average BHP monthly premium cost to cover this population to be between $294 and $393 per member
Mercer notes that these estimates are speculative at this early stage, with so many provisions of the ACA undefined and specifics of the Basic Health Program undetermined.
The complete report, State of California Financial Feasibility of a Basic Health Program, is available on the Mercer website through the External Link below.