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CMS Proposes BHP Federal Payment Methodology

The Centers for Medicare & Medicaid Services (CMS) proposed to keep the current methodology to determine federal payments to states that offer a Basic Health Program (BHP) as an affordable alternative to health insurance marketplace coverage in 2017 and 2018. The proposed methodology does contain some updated values for several factors.

CMS plans to release final methodology in February 2016 to allow states to make necessary adjustments before the Jan. 1, 2017 effectiveness date. As required by the Affordable Care Act, federal payments to states would continue to equal 95 percent of the premium tax credit and cost-sharing assistance that would have been provided to BHP consumers if they had enrolled in a marketplace plan. Payments will be calculated quarterly, based on the last quarter enrollment, and reconciled as states submit enrollment data each quarter.

The BHP allows states to provide affordable health care coverage to low-income individuals who are otherwise eligible to purchase coverage through the marketplaces but may be unable to afford a marketplace plan. Individuals must have a household income between 133 and 200 percent of the federal poverty level and must not be eligible for Medicaid or affordable, employer-sponsored coverage. In March 2014, CMS released a final rule to set state and federal BHP standards.

Comments to CMS on the proposed methodology are due Nov. 23. Contact Erin O’Malley, director of policy, at or 202.585.0127 with questions.


About the Author

Matt Buechner is the policy and advocacy associate for America's Essential Hospitals.

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