The future of Governor Mike Pence’s HIP 2.0 proposal hangs in the balance with the Department of Health and Human Resources (HHS). Pence’s high-deductible health plan model for expanding Indiana’s Medicaid program requires approval from HHS because it does not follow a traditional Medicaid model. After a meeting Monday with HHS Secretary Sylvia Mathews Burwell, Governor Pence said negotiations would continue.
“We had a substantive discussion, but we are not there yet,” Pence said. “Our administration will continue in good faith regarding our proposal to cover more low-income Hoosiers the Indiana way.”
A few days before meeting with Burwell, Governor Pence met with President Obama during a visit to Southern Indiana. Among other topics, the two leaders also discussed the Indiana plan to expand Medicaid. According to an article in The Wall Street Journal, Governor Pence believes that if Indiana is allowed to expand Medicaid using a consumer-driven approach, it open up a way for other states to expand their coverage as well.
In Pence’s HIP 2.0, an expansion of the Healthy Indiana Plan currently offered to a limited number of low-income Hoosiers since 2008, recipients would be required to contribute a small amount each month (between $3 and $25) into a POWER or health savings account which the state also would contribute to. Failure to contribute personally would mean some subscribers earning between 100% and 138% of the federal poverty level (FPL) would have their coverage cancelled for six months and those at or below 100% of the FPL would receive reduced coverage to a minimal plan requiring copays for services.
While the Pence administration has not announced which provisions of HIP 2.0 are causing the delay in approval, the Indianapolis Star reported on five issues in the Pence proposal which have caused problems for other states expanding Medicaid in non-traditional ways. Cost-sharing requirements, consequences of failure to pay, when coverage begins, charge for using the emergency room, and transportation for non-emergency health care have all been issues that other states like Michigan, Pennsylvania, Arkansas, and Iowa have had to compromise on to get their Medicaid expansion plans approved by the federal government.
Officials estimate that HIP 2.0 will provide a coverage option for an estimated 334,000 to 598,334 Hoosiers who have incomes under 138 percent FPL.
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