While Pence and Obama dance, these folks are waiting

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When Gov. Mike Pence sent a letter to President Obama last week pressing for a meeting to discuss his Healthy Indiana Plan 2.0, he closed by noting that “so many” of Indiana’s “low-income families” are “actively waiting” for health coverage.

That’s an interesting tack—one I’ve not noticed Pence taking before. A year ago, when he announced the Obama administration’s extension of the existing (and far smaller) HIP program through the end of 2014, Pence reminded reporters that health insurance is not the same thing as health care—and that there were lots of resources in Indiana to provide health care to the uninsured.

Even so, Pence can pressure the Obama administration to just say yes to his proposal—in spite of their misgivings—so that those low-income families don’t head into 2015 without a clear route to health coverage. (I saw “clear route” because, even if the Obama administration approved HIP 2.0 today, it’s not clear Indiana could ramp up the program fast enough to be ready to go on Jan. 1.)

But President Obama and his health secretary, Sylvia Mathews Burwell, could easily throw the argument back at Pence: Why are you letting subtle differences of policy stand in the way of providing coverage for all these Hoosiers in need?

If either side wants to go down this road, a new report from the Urban Institute, will give them more ammo than ever before.

It breaks down the age, race, sex and income levels of the 292,000 Hoosiers who are estimated (as of 2013) to have incomes too high to qualify for Medicaid yet too low to receive one of Obamacare’s tax credits to help them buy health insurance. They are said to fall into the “coverage gap.”

The median income of those 292,000 Hoosiers is just $9,300, which is about 65 percent of the federal poverty limit for their respective household sizes.

Meanwhile, those Hoosiers that are eligible for the tax credits in the individual insurance exchanges created by Obamacare have median incomes of $25,471—nearly three times as high as those in the coverage gap.

This is key, because the Obama administration appears to object to HIP 2.0’s requirement that families below the poverty line make contributions toward their health coverage. HIP 2.0 would require beneficiaries with incomes below the poverty line to pay $3 to $15 per month into a health savings account that would provide full health, dental and vision coverage. After that, participants would pay their medical bills out of their health savings account (which would also be funded with money from the state) and would face no co-pays or deductibles after that.

But if they failed to make those monthly contributions, participants would be switched over to a free plan that would not include dental and vision coverage, and would require co-pays for medical services that could exceed the contributions required for the fuller health coverage.

“By requiring people to have that responsibility to make that monthly contribution, they really take ownership of their own health insurance and their own health care,” Pence told the Wall Street Journal before his meeting with Obama.

“We simply will not agree to terms with the federal government that ultimately remove or water down the core principles. The core principles are personal responsibility, having a set of incentives and consequences,” Pence added. “We’ve grown increasingly frustrated with the lack of flexibility.”

Under Iowa’s coverage expansion, the Obama administration would only allow the state to charge beneficiaries with incomes between 50 and 100 percent of the poverty line a premium up to $5 a month. But those below 50 percent of the poverty line cannot be charged any money.

The most obvious reason for the low incomes of Hoosiers in the coverage gap is their lower levels of education: 72 percent of these Hoosiers have a high school degree or less.

Among those in the coverage gap, slightly more are men than women (one reason may be that pregnant moms with incomes up to 200 percent of the federal poverty limit can qualify for Medicaid).

One of every four of Hoosiers in the coverage gap is between 19 and 24. Most of those folks are going to be healthy and not in need of lots of medical care. And some chunk—maybe most of them—may have access to resources from their parents—a place to sleep, food. They might even be able to sign up for coverage on health insurance that their parents’ employers provide.

Just under half are aged 25 to 44. And the other 25 percent are aged 45 to 64, when health needs typically become more serious.

Minorities are more likely to be in the coverage gap than whites. Among Hoosiers in the coverage gap, 74 percent are white (versus 84 percent of all Hoosiers), 15 percent are black (versus 9 percent of all Hoosiers), 7.5 percent are Hispanic (versus 6.4 percent of all Hoosiers).

Can you imagine Pence issuing a statement saying the Obama administration’s delays are especially depriving minority Hoosiers of the help they need? Or Burwell issuing a statement saying Pence won’t give the poorest Hoosiers health coverage unless they pay him $3 first?

I can’t, actually. But if we do start to hear statements like that, I imagine it will be a sign the negotiations have broken down entirely.

And, on the flip side, if Pence and Obama reach an agreement, I can imagine them playing up how their deal will help these groups of people.

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