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Pence to unveil multipronged plan to expand health insurance

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Gov. Mike Pence will unveil his detailed plan to expand health insurance coverage to low-income Hoosiers on Thursday morning at two press events around the state.

Pence’s plan involves a combination of the Healthy Indiana Plan, employer-sponsored health plans and health savings accounts, according to an invitation email sent Tuesday to Indiana health care officials. The Healthy Indiana Plan, or HIP, currently enrolls about 40,000 Hoosiers who contribute a portion of their incomes to something like health savings accounts.

“After negotiating a one-year waiver for 40,000 HIP recipients, Gov. Pence has now developed plans to expand the program as an alternative to Medicaid,” stated the invitation to Thursday’s event in Indianapolis. The second press event on Thursday will be held in Fort Wayne, with a third scheduled for Friday in Jeffersonville.

"[Pence] plans to use private market-based reforms, employer-based plans, and HSAs to transform health care in a fiscally responsible manner for the Medicaid-eligible population in Indiana,” the invitation says.

The expansion of coverage was called for in President Obama’s health reform law, which offered to pay at least 90 percent of the cost of expanding the traditional Medicaid program so that it covered all Hoosiers up to 138 percent of the federal poverty limit.

Such an expansion has been estimated to pull in an additional 180,000 to 300,000 Hoosiers, mostly childless adults who are currently ineligible for Medicaid unless their incomes are just 25 percent of the poverty limit. Indiana hospitals are particularly keen to see coverage expanded, since unpaid patient bills sap about 5 percent of their revenue each year.

But the Pence administration has rejected the idea of expanding traditional Medicaid and instead asked the Obama administration to allow Indiana to use the Healthy Indiana Plan—or something like it—to expand coverage for low-income residents.

The Obama administration has been cool to the idea, especially HIP's requirement that Hoosiers with incomes below the poverty limit contribute part of their income toward health insurance. Medicaid, by contrast, requires no contributions for those who qualify. The Obama administration also had concerns over HIP’s enrollment cap, which hinges on available state funding.

But the two sides kept talking, and Pence expressed optimism in February after meeting face-to-face with Obama’s outgoing health secretary, Kathleen Sebelius.

“Our administration remains committed to using the Healthy Indiana Plan’s consumer-driven design,” Pence said in a statement after his meeting in Sebelius’ office, “and appreciates the secretary’s willingness to identify areas of common ground that will allow us to use an Indiana solution to meet our shared goal of providing more health care options to Hoosiers in a fiscally responsible manner.”

Pence has been working with Indiana hospital leaders to develop ways to fund the costs of the expansion that will be borne by the state—including the significantly higher reimbursement rates that the HIP program pays doctors and hospitals, compared with the Medicaid program.

Any Indiana health insurance expansion that is approved by the Obama administration would be paid for entirely by the federal government in 2015 and 2016, but would then require state contributions that could rise to $393 million per year by 2020, according to estimates by the actuarial firm Milliman Inc. Other elements of Obamacare are estimated to cost the state government $123 million per year by 2020.

In March, Pence’s staff began talking with Indiana hospital leaders about increasing a hospital assessment fee, which would allow hospitals and the state to qualify for additional federal funding to pay for the state’s costs. It is not clear if that idea will be included in the plan Pence announces on Thursday.

It’s also not clear if Pence will announce that he has struck a deal with the Obama administration. Indiana is required to submit an application this summer to keep the Healthy Indiana Plan going past its expiration date of Dec. 31.

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  • ACA
    People are talking and debating non-stop about Obamacare. It creates tension among people. To end all problems of the new health care law, this video in freedomcarebenefits.com promotes the best strategy in dealing with Obamacare.
  • HIP Reimbursement
    Currently, HIP reimburses at Medicare rates, not Medicaid rates, and most providers have been very happy with that. I think that is about as much as providers can hope for in what is ultimately a Medicaid-funded plan. For services that are not covered by Medicare, HIP pays 130% of the Indiana Medicaid applicable rate. My guess: Indiana will seek to use Medicaid premium assistance to purchase Exchange plans for the uninsured below 138% FPL, as Arkansas has done. (My guess: 100% AV SIlver Plan for those <100% FPL, and 94% AV Silver Plan for those between 100-138% FPL.) If someone is eligible for cost effective employer sponsored insurance, they will probably be required to take it instead. The real interesting part will be cost sharing. How much will new enrollees pay?
  • 45,000 Additional Medicaid
    After the 1st round of open enrollment, the state added 45,000 lives to the Medicaid and SCHIP membership. With the ACA and tax credits there is a gap that has to be addressed. I think the current state administration dropped the ball on reimbursement rates under HIP. To fill this Medicaid gap, medical providers have to involved in the plan.
  • Just More Politics
    Reading about the grand announcement that presidential candidate Pence is going to share with us all on Thursday, I wondered if anyone noticed that the article in IBJ noted that the Fed was paying 90% of the Medicaid Expansion--not true; the Fed is paying 100% for the first few years, then 90%. Indiana passed on the millions of dollars for 2014; now they are going for their own version for 2015. Pence can't scoop the Nation with his program however, as it appears that Michigan, Pennsylvania, Iowa, and Arkansas already have modified Plans submitted and/or approved. It's really tiresome to hear how Pence has just re-invented the wheel. You can find more comprehensive healthcare info at: http://kff.org/search/?s=medicaid+expansion Only on our little island called Indiana do people actually believe that we've got all the answers. I think it would delight the voters if we saw these politicians actually try to work together rather than grandstand their latest "solution" to work contrary to the Federal Government.
  • Not enough details...
    I guess we will have to wait until Thursday to get any details. In a related note, high deductible plans combined with health savings accounts are fine for healthy people. However for those with chronic medical conditions they are far more costly in comparison to regular Medicaid. Seems like the governor will expand eligibility without really expanding benefit coverage. But we will have to wait until Thursday to know for sure...
  • Reading before voting
    So far, it looks like Pence will know what's in the bill before it's passed. That alone makes him a better leader than any Washington Demorat.
  • Mike Pence
    Thank you Governor Pence for being a leader and saving our state from Obamacare!
  • Exchange
    This seems a lot like the state based & national exchanges established under the ACA or Obamacare.
  • Ah
    Another IBM deal in the works, I see.

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