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HIP waiver is useful as interim step


Gov. Mike Pence’s decision to use Indiana’s own health insurance program for low-income adults instead of accepting federal support to expand Medicaid eligibility has won the conditional support of the U.S. Department of Health and Human Services. It’s good news for the governor but only in that it buys some time. Even with new conditions placed on the Healthy Indiana Program, it falls short of the intent of the Affordable Care Act – access to health care coverage for all Americans.

In granting a waiver for Pence to use HIP through the end of 2014, the Obama administration signals a willingness to work with the states. It also shows the federal government is willing to leave thousands of Hoosiers without coverage – some 300,000 to 400,000 working poor earn too much to qualify for HIP but not enough to meet the state’s current Medicaid eligibility limit.

The state faces a serious challenge. With time running out, the Indiana Family and Social Services Administration must develop a plan to ensure coverage for the uninsured.

The idea behind HIP was that recipients must have some buy-in for participation. HIP now covers about 45,000 Hoosiers. It requires enrollees to contribute 2 percent of their income to something similar to a health savings account. The state contributes the rest for a balance for the would-be patient of about $1,100. Enrollees direct their own health care, using the account. Once it is depleted, the rest of their care is covered at no cost.

The decision not to follow other states’ lead in expanding Medicaid to individuals earning up to 138 percent of the federal poverty line means that Indiana does not get the 100 percent federal match for covering those under HIP. Instead, it receives its current match of 67 percent. It also shifts about 11,000 enrollees off HIP onto the new federal health care exchange program.

“It’s better than nothing, and I absolutely applaud that they kept HIP so we don’t have 37,000 uninsured,” Jeff Roos, executive director of Covering Kids and Families of Indiana, told the Washington Post. “We’re surrounded by states that have found a better way to do it.”

In Kentucky, for example, those 300,000 to 400,000 uninsured would qualify for Medicaid.

Indiana’s waiver is good through the end of next year. But after that HIP won’t meet the terms of the federal health care law because of its income eligibility requirements.

Indiana employers could face higher premiums than neighboring states because commercial insurers will be forced to subsidize hospital care for the uninsured. The governor has said charity care and publicly subsidized health programs will meet demand so that hospitals won’t have to, but health advocates say there aren’t enough public health programs to meet the need.

The Indiana Hospital Association offered a carefully worded response.

“HIP has been a successful program, and hospitals support using it as the model to expand coverage to as many as 400,000 uninsured individuals across the state,” wrote IHA President Doug Leonard. “With 2014 less than four months away, we hope these negotiations will begin quickly and will be just as fruitful. Cuts in federal payments to hospitals will accelerate as the Affordable Care Act continues to be implemented, making the expansion of coverage an increasingly urgent issue for our members and the health of all Hoosiers.”

A wise warning – one the state should heed.