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Pence not ruling out health partnership with feds

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Indiana Gov.-elect Mike Pence has ruled out building a state-run health insurance exchange but appears to be leaving open the option of running a joint venture with the federal government as a critical decision deadline draws near.

State leaders have until Friday to declare whether they will manage their own programs for providing insurance plans under the federal health care law. And even though he won't be inaugurated for another six weeks, Pence will provide Indiana's answer to the Department of Health and Human Services under an arrangement outgoing Gov. Mitch Daniels worked out with this year's gubernatorial candidates.

Pence, a longtime opponent of President Barack Obama's law, has said a state-run exchange would be too expensive and also has cast doubt on expanding the number eligible for Medicaid. But opposing a state exchange would not necessarily rule out a "hybrid" system of state control over federal resources, based on deadlines set by the Obama administration.

"It's just one step at a time," Pence spokeswoman Christy Denault said Wednesday. "Obviously Mike has been clear on his positions. We'll simply be expressing that again to the governor before Friday's deadline."

On the face of it, uninsured Indiana residents are unlikely to notice much difference between a federal health insurance exchange, hybrid plan or state-run system in the coming years.

Any option would involve residents logging onto a website and selecting pre-approved health plans with basic amounts of coverage and, according to estimates provided by the state to Indiana's gubernatorial candidates this summer, costs of roughly $400 a month.

Open enrollment for exchange plans is scheduled to start Oct. 1, 2013, and coverage will be effective Jan. 1, 2014.

"To the consumer there should not be a major difference between the models," said Caroline Pearson, director in the health reform practice at Avelere Health Care, which advises health providers on the law. "... You're going to have a website where you buy insurance, and it shouldn't matter a lot to the consumer whether that website is designed and run by the federal government or designed and run by the state."

Behind the scenes, however is a much more complicated situation involving political positioning and determining whether officials in Indiana or Washington, D.C., will bear the responsibility of building an extensive new health care infrastructure for the state.

Pence's opposition to a state-run exchange may be based on principle, but it's also smart politics, said Bob Laszewski, president of Health Policy and Strategy Associates, a Washington, D.C.-based firm advising health insurers on the new law.

If the Obama administration builds and runs an exchange it would not only bear the costs but also the responsibility for any failures, he said. And if the exchange is a shining success, Pence can swoop in and take it over after a year, he said.

"There's really no downside to Pence in letting the feds come in and build an exchange because he can come in and take it over within a year," he said.

It could also save Indiana money. The Pence campaign estimated building an exchange would cost the state $50 million a year. Pearson pointed out, however, that the Obama administration is offering grants to states to offset most, if not all, of that cost.

Mike Ripley, Indiana Chamber of Commerce vice president for health care policy and workforce safety, said there could be some leeway for Pence if he places residents in the federal exchange because of a possible loophole that would allow employers to avoid penalties for not covering workers. That theory has not been tested in court, he notes, but is popular among conservatives and being pushed by the Washington-based Cato Institute.

The chamber is pushing for the state to run its own exchange, despite the new costs, because of the autonomy that would come with such a move. Ripley notes that adding to the uncertainty from the incoming Pence administration and the federal government, is the potential the Indiana General Assembly will want a say when it reconvenes in January.

"Our opinion about all of these things is very fluid," he said. "There's so much uncertainty."

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  • Outlook
    If you're in decent health AND you're trying to buy private coverage as a cafeteria plan that covers everything, low/no deductibles and co-pays, and no annual/lifetime caps, you're just doing it wrong. You'll be paying rediculous premiums for coverage on way more products and services than you will ever need, because such policies are rated by the carriers as if you'll use everything to maximum. Instead, shop for Major Medical plans with very high deductibles and co-pays and lowest premium available, and self-invest in your own healthy choices and preventative care. The best thing the middle class should do is cancel the holidays completely. No gifts, no travel, no time off. Burn down as much debt as possible, and brace for the triple whammy of 2013: 1) cut in take-home pay from higher group plan premium deductions and higher tax rates, 2) lower retirement benefits and reductions in match percentages and frozen wages as employers try to absorb their higher costs of keeping the workerforce they have, 3) loss of hours and/or full-time classification as employers shift to part-time labor. The middle class is about to get hammered, and will need every penny saved now to survive. Companies may reorganize and split into separate entities to get their employee counts under the thresholds, and/or may shift to outsourcing wherever they can to cut the numbers down. As unpleasant as that all may seem, employers now have a bazooka pointed at their heads and must take steps to defend themselves. They can always reverse these actions in 4 years if/when the situation improves.
  • My Point
    ...was that the cost of her care is massive compared to mine ($0 in 7 years) and she pays much less in premium than what is suggest for me to pay to a gov't plan. Major Medical policy is $110/mo for this 40-something non-smoker ($50 more if smoker) from Assurant Health.
  • Obamacare not so bad
    Where do you think the federal government is getting the money to fund the states? The money tree? We all agree that some of the benefits are great...but middle class families cant afford to foot the bill even more!
  • MrGadget
    $400/month is still much cheaper than COBRA coverage or what coverage costs in the private market currently. Medicare-eligible seniors won't be involved in the exchanges, so I'm not sure what your point is.
  • $400 / month????
    That's 60% more than my grandmother pays for a private medicare -supplement- and she's 104 with Parkinson's. Who in their right mind thinks that's even close to reasonable or acceptable. Get it down to under $100/month and maybe we'd be more in the ballpark. Isn't the penalty tax only $750/year?
    • So, maybe ''Obamacare'' is not so bad.
      You think?
      • What is the matter with this guy?
        Governor Misses MAJOR Healthcare Deadline. Is Mitch Daniels Guilty Of Dereliction of Duty As He Desperately Tries To Jump Ship To Purdue? http://news.heartland.org/newspaper-article/2012/10/05/daniels-requests-indiana-gubernatorial-candidates-input-obamacare-imple
      • Indiana Falls Behind In Healthcare Reform
        Mitch Daniels decided in 2010 to create an Indiana healthcare insurance exchange. Today after signing an executive order and spending millions we have no state healthcare exchange. http://healthreform.kff.org/state-exchange-profiles/indiana.aspx State Actions to Address Health Insurance Exchanges http://www.ncsl.org/issues-research/health/state-actions-to-implement-the-health-benefit-exch.aspx

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