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Feds limit Healthy Indiana insurance extension

INDIANAPOLIS – The future of a state health insurance program for the working poor is in jeopardy after the federal government granted only a one-year extension for the effort.

The denial puts extra pressure on state lawmakers and the next Indiana governor, who must decide next year whether to expand Medicaid, which provides health care for the poor and people with disabilities.

Family and Social Services Administration Secretary Michael Gargano said Friday he received notification from the Centers for Medicare & Medicaid Services offering to approve a one-year extension for the Healthy Indiana Plan (HIP) – to Dec. 31, 2013.

CMS failed to approve a multi-year extension for the program and declined to respond to the state’s questions about using it to serve Hoosiers who may be eligible under a Medicaid expansion if the state decides to do so in 2014.

“We’re disappointed that after two years, Indiana still does not have an answer about the long-term future of (Healthy Indiana Plan),” Gargano said. “We will be forced to make a difficult decision about continuing HIP enrollment for a program that likely won’t exist after 2013. States have been seeking answers and flexibility, and this response hampers innovation and efforts to plan.”

The Healthy Indiana Plan has been the state’s health insurance program serving the so-called working poor since 2008. It has provided coverage for nearly 100,000 Hoosiers ages 19 to 64 who have no access to employer-provided insurance and don’t qualify for Medicaid.

It requires participants to pay sliding-scale monthly contributions and encourages preventative care. The program currently serves about 42,000 parents and childless adults.

Those people could still get health insurance if state lawmakers decide to expand Medicaid, the federal-state program for the poor and people with disabilities.

That expansion was a mandate in the federal health care act starting in 2014, but a U.S. Supreme Court opinion in June ruled the federal government cannot force states into growing the program by taking away existing federal Medicaid funding.

That leaves the decision on whether to expand Medicaid in 2014 up to Indiana officials.

The cost of the expansion would initially be borne solely by the federal government but could eventually cost Indiana hundreds of millions in new expenses every year.