Some states could hire health insurers to offer a new type of health plan – the Section 1331 Basic Health Program plan — to moderate-income individuals.

The Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services, talks about the Section 1331 Basic Health Program in a request for information set to appear in the Federal Register Sept. 14.

Congress put Section 1331 in the Patient Protection and Affordable Care Act of 2010 (PPACA) to give states an alternative to insuring moderately low-income residents through the new PPACA health insurance exchange.

If PPACA takes effect on schedule and works drafters hope, the PPACA will create new health insurance tax credit subsidies, new health insurance distribution exchanges, expanded access to Medicaid, and many other new programs and coverage options in 2014.

The Section 1331 program is designed for people who earn too much to qualify for free Medicaid coverage but too little to have an easy time paying for coverage.

To be eligible for the Section 1331 program, CMS officials say, an individual must:

- Be younger than 65 at the beginning of the plan year.

- Have a household income between 133% and 200% of the federal poverty level.

- Not be eligible for Medicaid or for affordable employer-sponsored coverage.

A state can contract with one or more insurers to provide the Basic Health Program plans, or “standard health plans.”

A standard plan offeror can be “licensed health maintenance organization, a licensed health insurance insurer, or a network of health care providers established to offer services under the program,” officials say.

Premiums for Section 1331 plan coverage are supposed to be comparable to what an enrollee would pay for coverage purchased through a health insurance exchange.

A standard health plan offeror must have a medical loss ratio of at least 85%, and the state running the Basic Health Program is supposed to get the equivalent of 95% of the premium tax credits and cost-sharing reduction funding that the state and eligible individuals would have been getting if the individuals were enrolling in coverage through a health insurance exchange.

CMS is asking commenters to discuss general Section 1331 program provisions, such as the factors states are likely to consider in determining whether to establish a Basic Health Program, and the challenges associated with running a Basic Health Program.

CMS also asks about standard health plan standards and standard health plan offerors.

“What additional standards, if any, should standard health plans participating in a state’s Basic Health Program meet?” officials ask. “What consumer protections should be included? How should quality and performance be measured?”

Elsewhere, CMS asks how states should design the Basic Health Plan contracting process and about the education and outreach that might be necessary to facilitate a helpful consumer experience.

Comments will be due 45 days after the Federal Register publication date.

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