Over the next few months the legislature will have to tackle some tough policy questions about whether to create a State Basic Health Plan for about 74,000 low income adults, who make too much money to qualify for Medicaid.

Under the Affordable Care Act, individuals who fall between 133 percent and 200 percent of the federal poverty level qualify for subsides through the exchanges, but the state can opt to offer those individuals a Medicaid-type plan and claim the subsidies itself.

Rep. Peter Tercyak, co-chairman of the Human Services Committee, said last year a bill which would have created a SBHP died thanks to a fiscal note he believes was inaccurate. It also didn’t help that Gov. Dannel P. Malloy’s administration opposed it.

Office of Policy and Management Secretary Ben Barnes testified last year that while there’s the potential for additional federal dollars, there’s too many unknowns.

Some of those unknowns still remain because the plan would largely be based on the “Essential Health Benefits Package,” which the Insurance Exchange Board has yet to develop.

The U.S. Department of Health and Human Services was expected to come up with an “Essential Health Benefits Package” this year, but instead issued a set of guidelines, which allows the states to do the heavy lifting. The draft guidelines issued by HHS suggest that benefits be comparable to those provided under a typical employer plan.

“The administration is in the process of analyzing whether it would be in the best interest of Connecticut’s residents and the state to implement a BHP,” Department of Social Services spokesman David Dearborn said Tuesday.

He said the Exchange Board first has to set the “Essential Health Benefits Package“ before the department is able to decide whether there would be enough subsidies to support such a plan.

“In that light, while it’s premature for us to have a position for or against the BHP, the administration is certainly considering it in the context of the Exchange and other health reform efforts,” Dearborn said.

But some advocates are sold on the idea of a State Basic Health Plan and Tercyak is one of them.

He said with the exchange still being largely private insurance many of the people who would be in this plan instead of that plan will protect private insurance companies from seeing their costs increase.

“The basic health plan helps protect the insurance companies,” Tercyak said. “So that there plans in the exchange can be reasonably priced.”

Katherine London, a research associate from the UMass Medical School Center for Health Law and Economics, told lawmakers Tuesday that they have an extraordinary amount of policy levers they need to pull before determining the cost of the program and the amount of federal revenue the state will receive.

“The State Basic Health Program option can give the state a way to provide comprehensive, coordinated benefits to low-income individuals in a way that’s affordable to those individuals and in a way that is also cost neutral to the state,” London said.

She concluded the legislature should strive this year to make decisions about the State Basic Health Plan to give it enough time to implement the exchange by January 2014. Plans for the exchange must be submitted to the federal government by January 2013.

Tercyak called the comment “interesting” because he thought the State Basic Health Plan was something that would be offered outside the exchange, however, he admitted he didn’t know how accurate that observation may be.

What is clear though, is if the state decides to move forward with a State Basic Health Plan it will need to offer the “Essential Benefits Package,” which the exchange will develop.

London said the decision to create a State Basic Health Plan will vary by state because it will depend on how many people the state has in that 133 to 200 percent of the federal poverty level range.

133 to 200 percent of the federal poverty level for a family of three is between $25,000 and $38,000 a year.

Providers like doctors and hospitals may be reluctant participate in the plan though if they will receive Medicaid reimbursement rates.

Jane McNicol, executive director of the Legal Assistance Resource Center of Connecticut said that’s clearly going to be one of the calculations lawmakers will have to make.

“How much providers get paid contributes to the cost of the program,” McNicol said. “In our ideal world this would look and act exactly like Medicaid.”