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Was HIP program enough?: Candidates spar over impact of Daniels' health reforms

October 27, 2008

Just how big of a deal was the Healthy Indiana Plan?

That seems to be the key question dividing Republican Gov. Mitch Daniels and his Democratic challenger, Jill Long Thompson, in their competing plans over health care reform.

Daniels' campaign for re-election points to his administration's ongoing rollout of the Healthy Indiana Plan as his entire plan for health care reform in his second term. The plan, which uses cigarette tax revenue to offer health insurance and health savings accounts for previously uninsured Hoosiers, was passed by the Legislature in 2007.

Meanwhile, Thompson and her surrogates contend that Indiana needs much more reform than Daniels so far has offered to truly tackle high costs and high rates of uninsured Hoosiers. Daniels' efforts could be improved, Thompson contends, by borrowing some recent changes made by Massachusetts.

"The Healthy Indiana Plan, it's an important step, but it's far from what you've heard," said Rep. David Orentlicher, D-Indianapolis, while debating on Thompson's behalf at a health care forum Oct. 13.

"It has a lot of drawbacks," he added, noting that the plan requires participants to contribute up to 5 percent of their income. "So we need to do a lot more."

Meanwhile, Libertarian candidate Andy Horning says both candidates are heading in the wrong direction by expanding-or even continuing-a substantial governmental role in health care.

"We have been raised since the New Deal to think that politicians have to be involved in health care," Horning said at the Oct. 13 debate, which was held on the campus of IUPUI.

To date, the Healthy Indiana Plan has signed up 30,000 Hoosiers, according to Daniels' point man on health care, Mitch Roob, secretary of the Indiana Family and Social Services Administration. But the goal of the plan was to sign up 132,000 people.

In an interview, Roob said he's "very pleased" with how the rollout has progressed so far, considering that the Daniels administration first had to persuade the Legislature to pass the bill and then had to negotiate with the Bush administration to approve part of the program.

"We continue to see steady growth in the number of eligible recipients," said Roob, predicting that the Healthy Indiana Plan will have 75,000 or even 90,000 participants by November 2009. In a second Daniels term, Roob said, he would like to expand the Healthy Indiana Plan to cover more childless adults.

The Healthy Indiana Plan, also called HIP, accepts families who earn up to double the federal poverty limit. However, it asks all participants to contribute a percentage of their income, from 2 percent up to 5 percent. Each Healthy Indiana Plan participant gets $1,100 in a health savings account to help him or her cover medical expenses.

Daniels argues that this personal financial responsibility will help Hoosiers spend less on health care, driving down overall costs.

But Thompson says a better approach to reduce costs is to allow individuals and small businesses to join a stateorganized pool that could purchase health care coverage at the lower rates paid by large employers.

Thompson would provide incentives to small firms to join the pool, using 3 cents of the 44-cent cigarette tax increase that funded the HIP program.

In addition, Thompson wants to help Hoosiers shop for health insurance by creating a quasi-governmental agency that would compare health plans for them. This agency, modeled after one in Massachusetts, would use centralized applications to reduce costs and cut out the need for benefits brokers.

Eric Wright, director of the Indiana University Center for Health Policy, said Thompson's plan could help insured Hoosiers who want more coverage. Many of those people have applied to the Healthy Indiana Plan even though they aren't eligible.

"It's important that we keep talking about this regardless of who gets elected," said Wright, who moderated the Oct. 13 debate. "There are a lot of innovative ideas in the HIP plan, but I think there's a lot of [other] ideas that haven't been tested out there in the real world."
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