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Medicaid expansion: Good health isn’t always an easy pill to swallow

Updated: March 1, 2013 6:40AM



It’s no secret that rank-and-file members of the Republican Party don’t care for the Affordable Care Act, and there are a number of provisions in the new law that if Indiana lawmakers have a choice, they probably won’t vote in favor.

The U.S. Supreme Court ruled in 2012 that the law will stay, but offered an opportunity for states to decide whether they will expand their Medicaid coverage. The question this year is whether the General Assembly in Indianapolis will provide for expanding Medicaid to the full potential under the ACA. Because of the amount of funding on the table from the federal government, it’s hard to say no.

“Despite all the things that you hear, I think it would be very difficult for them not to,” said David Orentlicher, a professor of law and medicine at Indiana University. “The terms are too good.”

By expanding Medicaid, any person making up to 138 percent of the poverty level, or around $33,000 for a family of four, will have access to health insurance. Those above would need to purchase their own insurance or receive coverage from their employer, though subsidies are also available depending on need.

Not expanding coverage, said Rep. Ed DeLaney, D-Indianapolis, would open up a coverage “doughnut hole.” Anyone who earns between $4,000 and $35,000 for a family of four could be left to pay for it on their own.

That’s about 400,000 Hoosiers without health care.

“So it’s free for the lowest incomes, and subsidized care for the middle class,” DeLaney said, “Our only question is the people in between, will they get anything? If we don’t act, they get nothing.”

Medicaid works as a state and federal program currently, where the state picks up about two-thirds of the costs, according to Orentlicher. As part of the expansion, for the first four years, the federal government will carry about 95 percent the tab for expanding Medicaid and gradually reduce its involvement.

What worries Republican state lawmakers is what will happen after the funding to implement the Medicaid expansion runs out.

“We’re balancing a public good here with fiscal responsibility,” said Matt Lehman, R-Berne, who chairs the House Insurance Committee. “And I don’t think that decision will be made before the final hour because we’ll have to see how it affects the budget.”

Early projections to fund Medicaid expansion fully could reach up to $2 billion after the federal funding is gone, said John Ketzenberger, president of the Indiana Fiscal Policy Institute.

“It’s a lot of money,” Ketzenberger added, “but that doesn’t mean new tax dollars would have to be collected.”

It’s possible other state funds in health care could be redirected to cover it, he said.

Hospitals are hoping that the state chooses to expand the Medicaid coverage. To help cover the costs for the new health care law, hospitals will see about $3.8 billion in cuts over 10 years. Brian Tabor of the Indiana Hospitals Association said hospitals expected the cuts, since the plan was that all patients would have some level of coverage to pay for treatment.

“If it’s not expanded,” Tabor said, “we’re going to have Medicare payments that are drastically reduced, and if it’s not expanded, it could really threaten hospitals. Some of our rural hospitals could close.”

Recently, Gov. Mike Pence said that expanding Medicaid is still a possibility, but it would have to be up to the General Assembly to find a financially responsible method. His current proposed budget would not cover the expansion.

“Certainly anything that the General Assembly wants to consider, this administration would be open to discussing,” Pence said. “But for me to accept any Medicaid expansion, it would have to be fiscally responsible and it would have to bring with it the ability to continue to provide the kind of innovation in health care that Indiana’s been able to advance.”

An innovative way to move forward with the expansion is to use the Healthy Indiana Plan. Republicans are likely to support this move, which would require more contributions from an individual for health care insurance.

“By having those elements of personal responsibility, I see that as a way to make the expansion more affordable and sustainable.”

Indiana is waiting to hear from the U.S. Department of Health and Human Services on a request to use HIP instead of Medicaid. And on Jan. 13, the Centers for Medicare and Medicaid Services identified possible cost-sharing efforts, like increasing co-pays set for Medicaid expansions and placing higher costs for nonpreferred drugs and nonemergency uses of the emergency room.

The encouraging sign for the medical profession is that Republicans haven’t shut the door based solely on political ideologies.

“They’re trying to reach a policy solution on Medicaid,” said Ketzenberger. “In the politically charged atmosphere, I think they’re trying to figure it out, and I’m encouraged by that.”



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