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Pence Reveals Details Of HIP 2.0 Proposal

Posted On May 16, 2014

By Mike Perleberg

hip-healthy-indiana-plan-logo(Indianapolis, Ind.) – Indiana Governor Mike Pence says he’s cautiously optimistic that the federal government will give approval to what he calls the Healthy Indiana Plan 2.0.

A Medicaid expansion is required by the federal Affordable Care Act. While many states have gone with a simple Medicaid expansion, Indiana is looking towards another mechanism to cover uninsured people.

The governor unveiled Thursday in Indianapolis his proposal to use HIP 2.0 instead of Medicaid – which he has called “broken” – to expand health insurance coverage to as many as 350,000 Hoosiers ages 19 to 64 living below 138 percent of the federal poverty level. That would mean individuals making $16,000 or less annually, or a family of four on an income of $33,000.

Currently, HIP covers 40,000 residents requiring them to contribute $1,100 toward their own care each year.

“There are two futures in health care – government-directed health care or consumer-driven health care. Indiana has chosen consumer-driven health care and intends to give eligible Hoosiers the power to make their own health care decisions through HIP 2.0,” Pence told a crowded hospital auditorium.

Pence’s proposal would have three HIP options. A premium assistance plan to help low-income workers access employer-sponsored coverage is one called HIP Link. It would allow individuals to choose to enroll in HIP to receive a state contribution to help fund their HSA.

The second and third options would use and health savings account-like Personal Wellness and Responsibility, or POWER, account. HIP Basic for Hoosiers below 100 percent of the federal poverty level which will use a state funded POWER account to cover the $2,500 annual deductible.

The third option is HIP Plus, for those between 138 percent and 100 percent poverty level, which will require members to pay $3 to $25 per month into their $2,500 POWER account along with state contributions that will cover the deductible.

HIP Plus will include will cover vision and dental care, however, HIP Basic will not.

“The contribution amounts are reasonable and fair by income level. As we have seen in our pilot program, low-income residents of our state take pride in managing their accounts and make contributions consistently,” Pence said.

HIP 2.0 still needs approval from the U.S. Centers for Medicare and Medicaid Services, which has already granted a one-year extension for HIP in its current form. The governor said the plan would be submitted for review by the end of June.

The insurance program would be funded at no additional cost to taxpayers, Pence claims, by using a combination of federal funds and an agreement with Indiana hospitals.

“The modified design of HIP 2.0 maintains emphasis on the principles of personal responsibility and represents our continuing efforts in Indiana to find innovative, fiscally responsible ways to get people the care they need,” said Debra Minott, Secretary of the Indiana Family and Social Services Administration. “All individuals in HIP will have incentives to get recommended preventive services and manage their POWER account funds appropriately.”

Some statehouse Democrats are welcoming the Republican governor’s insurance expansion proposal, but Indiana House Minority Leader Scott Pelath (D-Michigan City) did say that it’s coming about a year later than it should have.

“Does the plan announced today meet that demand? If the Obama Administration and Governor Pence can agree on a plan, everyone should applaud. It’s long past time to stop with the political grandstanding over Obamacare, and to start solving real problems for real people,” Pelath said in a statement.

“We have asked the Governor to offer affordable health care to all uninsured Hoosiers. And we have always said if his way works, we will not dicker over the details.”

The HIP 2.0 announcement drew reaction from a variety of sources Thursday. Indiana 6th District Congressman Luke Messer (R-Shelbyville) said HIP has been a tremendous success since its inception.

“I applaud Governor Pence’s vision to build on that success and expand coverage to more low-income Hoosiers without busting the state’s budget.  The Governor recognizes that putting people in charge of their health care and harnessing market competition will lower costs and improve outcomes.  I look forward to working with my Indiana colleagues in Congress to encourage the Administration to approve this innovative and fiscally-responsible plan,” Messer said.

The Indiana Hospital Association has voiced its support for HIP 2.0, saying that hospitals have suffered from $3 billion in uncompensated care during one year.

More information on the HIP 2.0 proposal is available on the State of Indiana website at www.HIP.in.gov.

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