Starting in 2015, the ACA gives states the option to implement a Basic Health Program (BHP) that covers low-income residents through state-contracting plans outside the health insurance marketplace. Some view BHPs as an effective strategy for improving affordability of coverage and reducing churning between Medicaid and marketplace plans. This paper reviews BHP’s federal legal requirements and funding mechanisms. It also analyzes key policy issues, including BHP’s implications for state costs and marketplace viability.