Wonkblog has a good explainer for what is being proposed by Indiana to expland its Medicaid program:
Pence last year insisted that he would only expand coverage if he could do it through the Healthy Indiana Plan, a health savings account-type of program for about 45,000 adult Hoosiers who didn’t qualify for the traditional Medicaid program…
Pence will lift HIP enrollment caps, opening up the program to working-age adults earning less than 138 percent of the federal poverty level ($16,105 for an individual or $32,913 for a family of four). Between 334,000 and 598,000 people will be covered under the plan, according to Pence’s office. Enrollment will open in 2015, with federal approval…
- HIP Members under the poverty level have the option to make monthly contributions. If they don’t, they’ll be transferred to a more basic level of coverage without vision and dental benefits. The lower coverage level requires co-payments for services, instead of monthly premiums. There are no co-pays, though, for preventive care and family planning services.
- HIP members above the poverty level who don’t pay a monthly contribution within 60 days are locked out of the program for six months. They can’t opt into the basic coverage level.
The basic plan design is a high deductible health plan where people are responsible for the first $1,100 of costs initially with it potentially expanding to $2,500. It is better than nothing, but it is a pretty shitty deal.
I don’t like high deductible plans for most populations. The one population where a high deductible plan has some value is not part of the Medicaid expansion population as a class:
individuals and families who are reasonably young (age is a pre-exisiting condition) without any signifcant claims history. The policies would not be automatically renewed until the most recent claims and medical history was reviewed. Furthermore, the potential buyer pool would be limited to people who have the ability to absorb a one-time shock of several thousand dollars without it being a crisis. This sub-population is fairly small, and can absorb the risk shifting that is inherent in a high deductible plan design. Anyone with chronic conditions or recurring health maitenance problems should not be a plan designed like this if the goal is to effectively manage health….
There is plenty of evidence that cost sharing (co-pays, co-insurance, deductibles), even nominal cost sharing, deters people from getting needed and approrpiate care. It also leads to worse health outcomes in general. These problems are most apparent down the income scale. As an example, a $10 copay for me is a mild annoyance; for someone making minimum wage and just getting by, it is their entire discretionary budget for a week if they are lucky.
Overall, the HIE health-related findings are inconclusive but they do suggest that some individuals, especially lower income persons in poor health, may be harmed by the deterrent effects of cost-sharing.
The second problem is that the level of insurance is worse than what is available on the Exchange. If I am an individual who makes between 100% FPL and 138% FPL, I will be far better off in the out years to go on the Exchange for a cost sharing assistance Silver plan as the total cost of my monthly premium is limited to 2% of income and the out of pocket is limited to $1,000 instead of $1,100 deductibles and 2.5% of income. The acturial value cost-sharing Silver plans for people who are also Healthy Indiana eligible would be 94% to 96%. The acturial value of the Medicaid expansion as proposed for Healthy Indiana is (eyeballing it) between 90% and 93%. Regular Medicaid acturial value is between 97% to 100% depending on the state.
This plan is better than nothing, but not much better. I think the HHS response will be to reduce deductibles, reduce premium payments and take away the basic level where the essential health benefits of dental and vision services are restored. As an opening line of negoatitions, this is promising that Indiana is willing to talk, but it should not get a waiver in its current form as it is a program that is still designed to place massive financial stress on a population of people who can’t handle additional financial or medical stress.