The Affordable Care Act employs two main avenues for expanding health insurance coverage to Americans. First, it extends Medicaid to additional low-income people and second it allows higher income individuals to purchase private health insurance with federal subsidies on new state-partnered health insurance exchanges.
On top of this, there is also expanded coverage by allowing states to run a so-called Basic Health Program beginning in 2014. The Basic Health Program would provide for states to offer public health insurance to people whose incomes are too high to qualify for Medicaid but also below 200 percent of the federal poverty level. In 2012 numbers, that means less than $46,100 for a family of four.
Payment for this program at the state level would most likely resemble Medicaid, according to an article at healthaffairs.org. States could draw on a portion of the federal dollars that would otherwise go to subsidizing the purchase of private insurance coverage for those people through exchanges.
Proponents of the Basic Health Program idea suggest that the plan would make coverage much more affordable for low-income people and save money for some of the states. On the other hand, others worry that the program could undermine the viability of the new state insurance exchanges and, rather than saving money, expose states to a greater financial risk.
Like most aspects of the Affordable Care Act, much is still up in the air. Federal officials have not yet provided many details for states about how the program will be operated.
The law would provide for the state to contract with multiple managed care plans and other organizations to offer insurance coverage. This insurance coverage must provide at least a minimum of essential health benefits which include hospitalization treatment for physical and mental health conditions, maternity, newborn, and pediatric care and prescriptions drugs.
To qualify for the Basic Health Program, a state resident must be under age 65, cannot be eligible for Medicaid and cannot be offered employer-sponsored coverage that is considered affordable under the law.