[MMA News Now, Jan. 10, 2013] Minnesota Department of Human Services (DHS) Commissioner Lucinda Jesson announced Jan. 8 that she and other DHS representatives will travel to Washington, D.C. to attempt to convince Medicaid officials to allow Minnesota flexibility and access to the funding available under the Basic Health Plan (BHP) option of the Affordable Care Act. 

The announcement, shared earlier in the week with MMA officials, is a clear shift from the Dayton administration’s earlier wait-and-see approach. The announcement coincided with newly released economic modeling results on the impact of the ACA on health care coverage and costs. The analysis suggests that, depending on the various options that might be considered in designing the BHP, the state could either save approximately $93 million per year beginning in 2016 or pay an annual cost of $349 million per year for covering 153,000 to 195,000 individuals. 

“We anticipate the creation of a Basic Health Plan to be a high priority for many legislators at the Capitol this session,” said Dave Renner, MMA’s director of state and federal legislation. “How the new program will relate to our existing MinnesotaCare program and the impact it will have on the provider tax will be important to the MMA.”

The ACA provides states with the option of providing those just above the new Medicaid eligibility limit (between 138 and 200 percent of poverty) a public program option in the form of a BHP. Absent a state BHP, individuals between 138 and 200 percent of poverty would receive tax credits to subsidize the purchase of private insurance offered through an insurance exchange.

The intent of the BHP option was to improve the affordability of health coverage options for a population that is near-poor, extremely sensitive to price changes/out-of-pocket costs, and with historically high rates of uninsurance. If a state chooses to enact a BHP, the state would receive 95 percent of the value of the tax credits that would otherwise have been available to individuals for purchasing coverage through an insurance exchange. 

Details as to the specific amount of available dollars and other BHP requirements have yet to be released by the federal government, however, making state-level planning a challenge.