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Milliman: HIP could save $156M a year

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The actuarial firm hired by the state estimates savings of about $156 million per year if Indiana uses its Healthy Indiana Plan to expand Medicaid coverage.

That estimate, included in a Jan. 30 draft analysis of Indiana’s HIP program, could become a key element of the argument Gov. Mike Pence uses to lobby the Obama administration for a waiver to use HIP to provide Medicaid benefits to more than 400,000 Hoosiers.

The analysis by Seattle-based Milliman Inc. found that Indiana has spent an average of $153 million less per year during the HIP program’s six-year-run than the spending caps established by the federal government.

Milliman’s analysis figures that HIP could achieve slightly more in savings--about $156 million a year--over the next three years if Indiana expands HIP 10-fold in order to cover all Hoosiers with household incomes up to 138 percent of the federal poverty limit. That expansion was called for by President Obama's 2010 health reform law, the Patient Protection and Affordable Care Act.

That expansion could include as many as 439,000 people by 2016, according to Milliman’s projections.

The HIP program provides health insurance coverage for low-income working adults, but requires them to make contributions up to 5 percent of their annual incomes. According to a January 2011 analysis of HIP, MIlliman noted that the program's additional coverage of vision and dental care, as well as its higher payments to doctors and hospitals, actually makes the program 44 percent more costly than traditional Medicaid.

At the same time, however, enrollees in HIP have been shown to make fewer non-emergency visits to the emergency room than Medicaid beneficiaries, which is one way the program has achieved lower spending than traditional Medicaid.

The purpose of Milliman’s latest analysis is to help the Pence administration show the federal government that using HIP will be budget neutral.

This month, Pence submitted an application to U.S. Department of Health and Human Services to extend the HIP program for three years.

Milliman’s previous projections about the cost of a Medicaid expansion in Indiana have drawn criticism. The firm estimates that expanding Medicaid in Indiana would cost, at a minimum, $140 million per year.

By contrast, an estimate by the Urban Institute, a left-of-center think tank in Washington, D.C., pegs the cost of Medicaid expansion in Indiana at about $54 million per year.

And an analysis by University of Nebraska researchers, commissioned by the Indiana Hospital Association, pegged the cost of a Medicaid expansion at about $72 million per year.

"There are a lot of variables. That's why there are so many different assessments of what the cost will be," Rep. Ed Clere, R-New Albany, told the Associated Press. "In order to calculate the potential cost, you have to make a number of assumptions, and whenever you change one or two of those variables it can cause the number to fluctuate wildly."

Milliman’s latest analysis includes the assumption that the cost of new enrollees in an expanded HIP program would run about 20 percent less per person than the 41,000 Hoosiers currently enrolled in the program—because it assumes the new enrollees will be younger and healthier, on average.

The HIP program ended up costing twice as much money per enrollee as expected when it first passed by the state Legislature in 2007.

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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