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Pence makes pitch for alternative to federal health care reform plan

Gov. Mike Pence unveils state's new health program thhe says would cover 350000 residents if approved by federal government Thursday

Gov. Mike Pence unveils the state's new health program that he says would cover 350,000 residents if approved by the federal government, Thursday, May 15, 2014, in Indianapolis. Pence's "HIP 2.0" is an altered version of the state's Healthy Indiana Plan, which currently provides health savings accounts to about 40,000 people. Indiana has been seeking federal approval to use the program, which was established in 2008 under former Gov. Mitch Daniels, as its vehicle to cover more uninsured residents. (AP Photo/The Indianapolis Star, Danese Kenon) NO SALES

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Updated: June 17, 2014 2:01PM



Gov. Mike Pence announced a proposal Thursday that would help almost 400,000 low-income Indiana residents gain health coverage through the Healthy Indiana Plan in 2015, but first it must pass federal muster.

Even though the governor is an outspoken critic of both Medicaid and the Affordable Care Act, Pence’s administration has been in talks with the Centers for Medicare and Medicaid Services for more than a year due to the large number of uninsured in the state and the prospect of leaving $17.3 billion in federal funds on the table over the next decade.

“Medicaid is not a program we need to expand. It is a program we need to change,” Pence said.

Pence wants to create a three-tier “HIP 2.0” to replace the state’s current Medicaid program (excluding the disabled) and expand eligibility to Indiana residents making up to 138 percent of the federal poverty level, or approximately $16,105 for an individual or $32,913 for a family of four.

HIP Plus would provide medical, dental and vision coverage, and enrollees would contribute from $3 to $25 monthly, depending on their income, to a health savings account. HIP Basic would provide medical coverage only and co-payments would be required.

A third tier — HIP Link — would offer insurance premium support for people to purchase coverage through their employers. It wouldn’t take effect until 2016.

Though “the devil is in the details,” state Rep. Charlie Brown, D-Gary, credited the governor for his proposal.

“I applaud the governor for at least taking the step, so all those eligible will be able to gain coverage,” Brown said.

HIP, which was rolled out in 2008, currently provides coverage to about 42,000 Indiana residents who pay for the first $1,100 of their care via health savings accounts. Those contributions have been a key disagreement in negotiations between the state and the federal government.

In case the proposal doesn’t gain approval, the state also will submit a waiver to renew the current HIP program as a contingency plan.

Pence traveled to Fort Wayne on Thursday afternoon to discuss “HIP 2.0,” but Brown, who wrote the original HIP legislation, asked why Pence didn’t make a stop in Northwest Indiana as well.

“The most inquiring question of all, and one I raised with his staff, was what about Northwest Indiana, where we’ll have a sizable number of people eligible?” Brown said. “It really bothers me we don’t get respect from the governor.”

In addition to federal funds, the program would be paid for with cigarette tax revenue and a Hospital Assessment Fee program.

The Indiana Hospital Association is supportive of the plan, but safety net hospitals, such as Methodist Hospitals, which reported providing $57 million in charity care in 2013, are concerned about the impact of the fee.

“It is critical that the unique role of safety net hospitals is recognized in the details of the plan, such as exempting safety net hospitals from any hospital assessment fees that are associated with the plan or protecting them from further reduction of net reimbursement,” Matt Doyle, Methodist Hospitals’ vice president and chief financial officer said in a statement.

The state will submit its waiver, which covers a five-year period, by June 30 to the Center for Medicare and Medicaid Services. CMS spokeswoman Emma Sandoe said her agency is “encouraged by Indiana and Governor Pence’s commitment to helping cover more of the state’s uninsured population through the Healthy Indiana program and look forward to seeing his proposal.”

Public comment will be sought over the next 30 days. Two formal public hearings will be conducted May 28 and 29 in Indianapolis. They can be attended in person, by phone or webcast. For more information, visit hip.in.gov.



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