Critics, supporters respond to Gov. Pence’s announcement of new healthcare plan

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INDIANAPOLIS – Gov. Mike Pence has announced a new initiative to expand the Healthy Indiana Plan as an alternative to Medicaid expansion, but not everyone is on board with the Governor’s plans.

The initiative, called HIP 2.0, will focus on a combination of avenues through which Indiana residents can get health insurance instead of using Medicaid. Under the Healthy Indiana Plan, even low-income residents contribute a portion of their income.

Pence has been in talks with the federal government for several months, discussing the possibility. Pence said the state would be seeking a waiver from the federal government, based on the new plans, which he announced Thursday morning at IU Health Methodist Hospital.

The governor will also travel to Fort Wayne and Fremont later in the day to talk about the initiative with residents in those communities.

According to a release from state officials:

HIP 2.0 is the State of Indiana’s plan to improve and expand the successful Healthy Indiana Plan (HIP) and concurrently eliminate traditional Medicaid in Indiana for all non-disabled Hoosiers ages 19-64. HIP currently provides health insurance coverage for uninsured adult Hoosiers ages 19-64 whose household income is at or less than the federal poverty level (FPL) and are who not otherwise eligible for Medicaid. HIP 2.0 builds on the successes of the original HIP design. It adds new pathways for coverage that promote employer-sponsored coverage and continue HIP’s private market consumer-directed model with incentives for members to take personal responsibility for their health.

“Reforming traditional Medicaid is essential to creating better health outcomes and curbing the dramatic growth in Medicaid spending,” said Governor Pence. “HIP 2.0 takes consumer-driven Medicaid reform to the next level by replacing traditional Medicaid for many in Indiana with a plan that empowers participants to take charge of their health and to be cost-conscious consumers.”

Some of HIP 2.0 innovations include:

  • HIP 2.0 introduces a new HIP Employer Benefit Link plan that supports participation in employer-sponsored insurance plans.
  • It maintains and increases the Personal Wellness and Responsibility (POWER) account, modeled after a Health Savings Account, from which members would pay for medical services.
  • It provides a new option for families to be covered by the same health plan.
  • It facilitates linkages to employment services and rewards individuals for securing employment and moving off public assistance.

The health plan will be an option for Hoosiers ages 19 to 64 with incomes up to 138 percent of the federal poverty level, which is approximately $16,105 annually in 2014 for an individual or $32,913 for a family of four. The benefit structure is similar to commercial health insurance plans.

The governor said HIP 2.0 will not raise taxes and would be funded entirely through the state’s existing cigarette tax revenue and Hospital Assessment Fee program, in addition to federal Medicaid funding.

“The modified design of HIP 2.0 maintains emphasis on the principles of personal responsibility and represents our continuing efforts in Indiana to find innovative, fiscally responsible ways to get people the care they need,” said Debra Minott, Secretary of the Indiana Family and Social Services Administration. “All individuals in HIP will have incentives to get recommended preventive services and manage their POWER account funds appropriately.”

But some opponents, such as Rep. Andre Carson, D-IN, said they were not supportive of the plan:

“I have serious concerns that it is an untested proposal that will still fail to provide critical health coverage to thousands of Hoosiers,” said Carson in a written statement. “The reality is, despite modest expansion of programs like the Healthy Indiana Plan, our state remains a Midwestern island of the uninsured with almost 200,000 Hoosiers stuck in the coverage gap. By contrast, look to our north, south, east and west, and you’ll see states governed both by Republicans and Democrats that have chosen to expand Medicaid coverage.

“We could have made that choice, and more than 400,000 low-income Hoosiers would have had access to health care by now. Instead, we continue to try to reinvent the wheel. As someone who believes we have a duty to provide access to health care services to all Hoosiers regardless of their ability to pay, this is a frustrating situation.”

More information about HIP 2.0 here.

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