Options to Increase Health Coverage in West Virginia

We examine two alternative policy proposals to increase health coverage in West Virginia. The first proposal is a federal Basic Health Program (BHP) 1331 option that would provide a new affordable health plan option to West Virginians with incomes up to 200 percent of the Federal Poverty Line (FPL). The second proposal is an approach using a federal 1332 Innovation Waiver that would allow the state to offer a new affordable health plan option to higher income individuals. Both approaches would provide a more affordable health insurance plan option that is similar to existing Medicaid coverage for West Virginians with incomes under 138 percent of the FPL. We find that a BHP would be feasible at provider payment rates of Medicaid plus 25 percent, a little lower than Medicare rates. A federal Innovation Waiver approach would create a Medicaid-based plan that would compete with other plans in the nongroup market, likely leading to lower premiums. However, nongroup premiums would have to decline by at least 8 percent for the proposal to not result in increased spending by either federal or state governments.