Indiana freezes some medical savings account rolls

The newly approved federal health care bill will put 500,000 more Indiana residents on Medicaid and lead to higher state
taxes, Gov. Mitch Daniels said Monday, but a government insurance proponent said it will help families and businesses.

Daniels also said he was temporarily freezing some enrollment in Indiana's medical saving accounts for low-income adults
while the state determines the impact of the federal legislation. He also ordered Secretary Anne Murphy of the Family and
Social Services Administration to plan for phasing out the accounts, known as the Healthy Indiana Plan.

Under the new federal legislation, people enrolled in HIP will move onto Medicaid, Daniels said.

"I see no reason to add people to the rolls of a program whose days are numbered," Daniels said.

Lawmakers said the enrollment freeze would have little impact because it does not apply to parents of minor children, and
enrollment for other adults has already been largely capped by federal rules.

Indiana Attorney General Greg Zoeller, meanwhile, announced he was considering ways to join his counterparts in other states
in challenging the legislation in court. Daniels and Zoeller are among a large number of state Republican officials who object
to the legislation pushed by President Barack Obama and other Democrats.

The 10-year, $938 billion bill narrowly passed by the House late Sunday would extend coverage to 32 million uninsured Americans
and ban insurance company practices such as charging more to women and denying coverage to people with medical problems. Obama
is expected to sign it Tuesday.

"I think a very serious mistake was made yesterday," Daniels said. "It will lead certainly to higher taxes,
higher health care costs and a much weaker economy going forward."

The nonpartisan Congressional Budget Office has said the legislation would cut federal deficits by an estimated $143 billion
over a decade. For the first time, most Americans would be required to purchase insurance, and face penalties if they refused.
Much of the money in the bill would be devoted to subsidies to help families at incomes of up to $88,000 a year pay their
premiums.

Indiana now has about 1.2 million people on Medicaid, the federal-state health insurance program for children and low-income
adults. Daniels said the federal legislation will add half-million people to those rolls.

"It will force people into Medicaid. There's no room in this bill for personal responsibility. There's no room
for innovative programs like HIP," Daniels said. "The next governor of this state is going to be faced with massive
new Medicaid costs that we don't face now."

Daniels said the Healthy Indiana Plan, an initiative of his approved by the General Assembly in 2007, would be dismantled
by 2014 under the health care overhaul.

HIP provides medical savings accounts worth $1,100 a year, and when health care costs exceed that amount, benefits of at
least $300,000 annually.

As of Feb. 28, it had 24,906 adults with dependent children and 20,514 other adults enrolled. It also had a waiting list
of more than 40,000 childless adults because the federal government bars the state from enrolling more than 34,000 in HIP.

David Roos, director of the public health insurance advocacy group Covering Kids & Families of Indiana, said in the long
term, the federal bill will provide better coverage at less cost to the state and less cost to almost everyone now enrolled
in HIP and health insurance programs in other states.

"The federal health care bill will provide insurance for hundreds of thousands of low-income Hoosiers who are currently
uninsured and cannot afford to pay for coverage by themselves," Roos said.

The bill also will help businesses that currently cannot afford to provide coverage to their employees, Roos said.

Indiana House Health Chairman Rep. Charlie Brown, D-Gary, said the HIP enrollment freeze is "kind of shortsighted of
the governor. We're talking about another three years before there would be any impact."

Brown, who has pressed without success for a statewide smoking ban, noted the Healthy Indiana Plan has been funded in part
by a cigarette tax increase of 44 cents per pack.

"I think all the smokers in Indiana will be happy to know they're going to get their 44 cents back," Brown
said.

Daniels press secretary Jane Jankowski said the state might need to let the cigarette tax funds accumulate to help with future
Medicaid costs.

Please enable JavaScript to view this content.

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.