Governor Mike Pence this morning unveiled a new state sponsored health care plan, which he says is an attempt to close Indiana’s coverage gap.
It’s being calling HIP 2.0.
Pence’s administration will be submitting the proposal to the federal government as an expansion of Medicaid.
Under the current plan, those with an income equal to or less than 100 percent of the federal poverty level qualify for the coverage.
But the governor says a coverage gap still exists for approximately 350,000 Hoosiers.
In an attempt to make up the difference, HIP 2.0 will cover those making up to 138 percent of the federal poverty level.
Like the original Healthy Indiana Plan, HIP 2.0 asks individuals to pay into a health savings account. Those who do will be eligible for a new top tier plan called HIP PLUS.
However, in keeping with minimum Federal requirements, the state will not deny someone coverage if they fail to make payments into their so-called POWER account.
Instead, Governor Pence says a lower tier default plan called HIP Basic will be made available.
“Members of this plan must make co-pays and will receive fewer benefits – if they move from the HIP Plus plan to the HIP Basic Plan – they must return to making their contributions to their power accounts to HIP Plus again,” Pence says.
The governor says he hopes things like dental and vision coverage and a sliding scale based on income will incentivize consumers to pay into their power accounts.
“HIP 2.0 takes consumer-driven Medicaid reform to the next level by replacing traditional Medicaid in Indiana for all able-bodied adults and offering instead a health care culture in our state that’s built on healthy, cost-conscious decision making,” Pence says.
A third option called HIP Link also exists, which will allow individuals to use their power account dollars to take part in available employer offered health care plans.
The Pence administration will submit their waiver application at the end of June.
Brian Tabor, Vice President of Government relations at the Indiana Hospital Association, says the new plan will reimburse providers at 100 percent of Medicare levels to help reduce rising uncompensated care costs.
“So the costs for hospitals will be reduced,” Tabor says. “And so even through paying those payments, there will still be a net gain for hospitals.”
By increasing the eligibility threshold, the state could also qualify for matching funds from the federal government. Pence says that in combination with cigarette tax money should make the plan solvent. The plan must be approved by the federal government.
In a statement, Indiana House Democratic Leader Scott Pelath said the new plan was long overdue, saying Democrats have asked the Governor to offer affordable health care to all uninsured Hoosiers for some time.
The plan will now be open for a 30 day public comment period from the state and an additional comment period at the federal level.