Thousands of Hoosiers who are buying health coverage through a federal insurance exchange could face confusing changes if Indiana gets permission to offer its own program sometime next year.
Open enrollment started Saturday in the federal marketplace. Last year, some 25,000 Indiana residents whose incomes are between 100 percent and 138 percent of the federal poverty level bought their coverage through the exchange – and qualified for a federal tax break that lowers their premiums.
But Gov. Mike Pence has for months been seeking permission to serve that same population by expanding the Healthy Indiana Plan, an alternative to Medicaid that uses federal dollars to subsidize care for lower- and middle-income individuals and families.
Federal officials have not yet acted on the request – although talks between the state and Centers for Medicare and Medicaid Services have continued – despite urging from Indiana government, health care and social services leaders.
“The time has come for a decision from the federal government on this issue,” Pence said on Thursday.
Additional delays could create problems for the population of Hoosiers who would qualify for HIP 2.0, the name the governor has given to the proposed expansion.
Those people currently qualify for the tax credit available from the federal exchange. But if the U.S. Health and Human Services Administration approves HIP 2.0, they’ll lose the tax credit because they’ll qualify for the new state program. Those customers would then have to switch health insurance plans midstream or face paying back their tax credits.
A switch might not be necessary – or would probably affect fewer people – if federal officials approve the Indiana proposal soon. State officials say they could be ready to start enrolling Hoosiers in January. But there’s been no indication from Health and Human Services about when a decision could come and officials at the agency don’t comment on pending waivers.
State officials say a decision can’t come soon enough.
“We have worked with HHS in good faith to put forward a consumer-driven proposal that they have full legal authority to approve,” said Michael Gargano, deputy secretary at the Indiana Family and Social Services Administration, said in a statement.
If approved, HIP 2.0 will replace a traditional Medicaid expansion called for by the federal Affordable Care Act. All non-disabled adults ages 19-64 who earn between 23 percent and 138 percent of the federal poverty level would be eligible. In 2014, that means a maximum income of $16,105 annually for an individual and $32,913 for a family of four.
But federal officials have questions about the proposal, which calls for participants to pay some of the cost of the coverage or the care. It also uses medical savings accounts, which Pence says helps Hoosiers direct their own health care.
Pence said the negotiations are ongoing and substantive but need to come to a close soon.
“They’ve been taking place in good faith,” Pence said. “We are just determined to build on the successful experience that Hoosiers have had with the Healthy Indiana Plan.”