The State of Indiana has been allowed an exception for one year from the Affordable Care Act and has subsequently denied government incentives to expand Medicaid and has declined to set up an exchange for consumers. This exception is being officially referred to as a health-law “waiver”. This exception was given to Indiana in order for them to continue with their pilot Medicaid program referred to as Healthy Indiana Plan (HIP) which first started in 2008. This one year waiver allows for further discussion between Indiana and the Obama administration to see how Medicaid expansion could occur in the state of Indiana as envisioned under the Affordable Care Act.
Indiana Governor Mike Pence believes this particular program works well by forcing consumers to be responsible for their health-related decisions. This program works differently than traditional Medicaid by capping the number of participants and the types of care they can receive. It does not cover all the services that Medicaid does, and requires that all participants share costs. Governor Pence believes this will “stimulate greater personal responsibility and keep costs down by encouraging smarter decisions from patients.” There are roughly 37,000 citizens of Indiana that are currently in the HIP program, with 53,000 on the waiting list. Full Medicaid expansion would provide coverage to roughly 300,000 to 400,000 citizens. The extension through next year has allowed Indiana to add on roughly 10,000 more citizens but cuts in half the maximum income to be eligible for HIP. Governor Pence originally wanted to use Medicaid expansion under Obamacare to cover all 400,000 uninsured citizens under the HIP program.
After talking with the Obama administration, he decided that would not be possible. Nevertheless, Governor Pence still decided to go against Medicaid expansion, which would have provided many of the uninsured citizens with coverage. Below is a graph displaying the amount of citizens who currently have health insurance.
Approximately 12% of the population was uninsured in 2011. With only minor changes to health insurance in Indiana after that, there is still a large amount of uninsured that will resent Governor Pence’s decision. According to Pence, it is more important to cap costs and stimulate patient responsibility than receive aid and increase state health care costs.
Without the funding to cover all of the citizens, it seems unlikely that this one-year trial HIP is going to go over well with the many citizens of Indiana who currently do not have any health insurance. Although Governor Pence was going to try to use Medicaid expansion money to expand this project, when he realized that it was not going to be allowed, he should have either relented to Medicaid expansion or denied it explicitly. Furthermore, the compromise of a one-year extension will have a marginal impact on the uninsured population. If this is the plan the Obama administration has in mind to make sure Indiana adopts their form of Medicaid expansion, it is probable they will receive a large amount of support from the numerous citizens disappointed with Governor Pence for refusing aid.
- Feds Agree To One-Year Extension Of State Health Insurance (indianapublicmedia.org)