This has been in the works for awhile now but yesterday Indiana Gov. Mike Pence released the details of a new proposal to expand insurance coverage to low income Hoosiers through the states existing Healthy Indiana Plan (HIP). The program, dubbed HIP 2.0, if approved by Health and Human Services would serve as an alternative to the Medicaid expansion contained in the ACA. The new plan would still extend coverage to everyone with annual incomes up to 138 percent of the Federal Poverty Line (just under $22,000 for a family of 2 this year ), but use the existing structure of HIP as a framework for coverage. Right now HIP covers a limited number of low-income uninsured while requiring monthly premiums, copayments, a high deductible, and contributions to a Health Savings Account.
Some of that would change under HIP 2.0, most of which reflect concessions to receive waiver approval from HHS. The major change would include creating a two tier coverage structure; a basic level with slight copayments but no premiums for those living beneath the FPL, and a higher level with extra coverage (optional for those below the FPL, mandatory for 100-138 percent of the FPL) that would include a deductible and require contributions to an HSA. For the higher tier failure to make timely payments would result in a six month ban from eligibility. While not explicitly stated (that I saw reported, at least), both tiers would probably have to provide additional coverage benefits and the elimination of HIP’s current annual and lifetime caps to receive CMS approval.
For a more extensive overview see Adriana McIntyre, who’s blogging this summer over at Vox. But as Dr. Aaron Carroll wrote in The Upshot the plan appears to face likely approval from an administrative agency that has cut Medicaid expansion waiver agreements in other states. Indeed, HIP 2.0 would expand coverage to those that desperately need it, potentially reaching ~375,000 residents, while fulfilling the broader conservative health care vision for requiring more “skin in the game” from the low-income uninsured. In the wake of some pretty terrible legislative rewriting from the bench, this is what compromise looks like on expanding Medicaid — less than the what ACA intended but better than nothing.