Malloy administration: Basic health program “premature”

The Malloy administration is urging lawmakers to hold off on creating a health program for low-income adults who don’t qualify for Medicaid under federal health reform, saying action now is premature.

As it did last year, the administration is arguing that more information needs to be available from the federal government before the state can make a decision on whether to create a “basic health program.”

“Due to the many important outstanding questions regarding the design, funding and functioning of a Basic Health Program, there is not sufficient information at this point in time to evaluate whether it would be in the best interest of consumers, the State, and the Connecticut Health Insurance Exchange to establish such a program,” Office of Policy and Management Secretary Benjamin Barnes said in written testimony on a bill scheduled for a public hearing Tuesday afternoon in the Human Services Committee.

The basic health program is an option under federal health reform that allows states to provide state-run coverage to people who don’t qualify for Medicaid.

Under the reform law, states must expand their Medicaid programs to cover adults earning up to 133 percent of the poverty level beginning in 2014. The law also gives states flexibility about how to handle coverage for people earning just above that — between 133 percent and 200 percent of the poverty level. People in that income category who don’t get coverage through their jobs could get federal subsidies to buy insurance through the exchange, a state-based marketplace for purchasing coverage that’s expected to sell mostly private plans. Or the state could create a basic health program to cover them instead, in which case the federal government would pay the state most of what it would have spent giving those individuals subsidies to buy coverage.

Advocates for low-income residents are pushing lawmakers to commit to creating a basic health program this year. They say it could be problematic for people whose incomes fluctuate just above and below the Medicaid limit to have to pick and pay for coverage through the exchange, and say it would be better to offer a state-run plan that would have the same design and network of health care providers as Medicaid.

Advocates are also concerned about adults who are currently covered by Medicaid and have incomes above the limit required under federal law. Currently, parents and guardians of minor children can receive Medicaid coverage, known as HUSKY, if they earn up to 185 percent of the poverty level, and advocates worry that once there’s another insurance option available to them through the exchange, state policymakers won’t have as much motivation to continue covering them through HUSKY.

But in his testimony, Barnes wrote that committing to offering a basic health program would be premature, noting that federal guidance and regulations haven’t yet been issued.

Before the state evaluates the merits of a basic health program, Barnes added, the state must answer key questions, including how much it will cost, what the impact will be on the viability of the exchange, whether there will be enough Medicaid providers to adequately serve basic health program members, and whether the state would be allowed to administer a basic health program using the administrative model now used in Medicaid.

Barnes said the basic health program must be cost-neutral to the state or reduce costs, and said the decision about whether to create a basic health program must be made in consultation with the board designing the exchange.

“The Malloy Administration is fully supportive of the goals of improving access to affordable and meaningful health care insurance, reducing the number of individuals without health insurance and improving the quality and efficiency of our health care system,” Barnes said. “Towards this end, more information is needed before it can be determined that implementing a Basic Health Program in Connecticut will contribute to these goals.”