More on the flexibility of Basic Health Plan

Andrew Sprung has a well done, longish piece on the future of the ACA that quoted me (accurately) at length, based on an interview we did after the release of the Coburn, Burr Hatch health reform plan.

Andrew has a follow up piece focusing on my comments about trying to expand health insurance coverage in the South, and my proposed use of section 1331 (Basic Health Plan) of the ACA, that figures prominently in my white paper on health reform in North Carolina Don Taylor NC Health Reform Proposal 1 14 14.

The essence of my suggestion is to create a Basic Health Plan option for persons from 0-200% of poverty in North Carolina, who could purchase private health coverage from a traditional insurer such as BCBS NC, or directly from integrated delivery systems like UNC, Duke or ECU and/or Community Care North Carolina (CCNC), in lieu of a traditional Medicaid expansion. It is a plan to expand health insurance coverage for relatively low income people using private insurance as the coverage vehicle instead of Medicaid.

Andrew makes a good point that more left leaning states could try to use a BHP in the opposite direction (he suggests seek a waiver up to 400% of FPL and have it be a choice on an exchange; I’m not sure it would be granted out of worries that it would destabilize the exchange, but who knows, in a strong exchange why not have another, lower cost option?). The existence of the Basic Health Plan option and the more expansive exchange waiver options that begin in 2017 points out that for all the rhetoric of top-down health reform, state flexibility is a feature, and not a bug of the ACA. Vermont has long said they intend to seek “single payer” for their state in 2017 (I put it in quotes because what they really intend to do is use multiple payers to put together true universal coverage in the State), but perhaps the BHP means they could start moving in that direction sooner. On balance, I suspect the Southern States have more leverage than do the eager adopters to try something different, since their default is not expanding Medicaid and this is not a good outcome from the Administrations perspective. It also highlights the vast differences in the politics of health reform and the ACA across states–politicians in Vermont want to use the language of single payer, while many in the South are averse to an increased role for Medicaid.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

4 Responses to More on the flexibility of Basic Health Plan

  1. Brad F says:


    Its one thing to take a lump sum to manage a somewhat known cohort with safety net chassis, ie, low cost providers. Feds intended BHP for Mcaid population, as you know.

    Expand the concept to 400% of FPL, and either you have higher earners accepting care within “second tier” network (dont see it) or integrated providers taking big $ risks, again cap payments, within private payer world. How many can do that comfortably now or decade to come?


    • Don Taylor says:

      I think you are probably correct. Plus, states wanting to go the other direction won’t have the leverage for a waiver that the feet draggers will. Plus, in 2017 states can get more general flexibility in any event.

  2. Brad F says:

    One thing you will also have to consider in a 200% FPL BHP is the cliff at 201%.

    You will recall this excellent NEJM citiation:

    In the end, no optimal routes. Perhaps AK model best.


    • Don Taylor says:

      Not sure how big the cliff is there, but is a change….but anything with a means test introduces perverse incentives. Also, they were writing assuming Medicaid was going to be expanded.The side benefit of BHP in NC is to intro some competition (of a sort) to the exchange. The ‘no optimal routes’ is definitely the true.

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