INDIANAPOLIS | The Healthy Indiana Plan, a government-supported high deductible health insurance program used by some 37,000 low-income Hoosiers, will continue through at least 2014 — but about a third of current participants will be forced out.
Gov. Mike Pence announced Tuesday the federal Centers for Medicare and Medicaid Services approved Indiana's request to continue the popular program beyond the January 1 start date for most components of the Affordable Care Act which, if fully implemented in Indiana, would render HIP unnecessary.
"Securing the waiver to continue the Healthy Indiana Plan is a victory for Hoosiers enrolled in this innovative program and it will ensure that Indiana remains in the forefront of consumer-driven health care in the United States," Pence said.
HIP participants pay up to 5 percent of their incomes to a POWER account, similar to a health savings account, which is used to pay initial medical expenses. Participant health care costs beyond $1,100 a year are shared by the state and federal government.
The agreement to continue the program for at least one more year includes changes to HIP eligibility requirements.
Effective Jan. 1, HIP participants cannot earn more than 100 percent of the federal poverty level — which is $11,490 for an individual, $15,510 for a family of two or $23,550 for a family of four.
About 11,000 current HIP participants that make between 100 and 200 percent of the federal poverty level will soon receive a letter from the Indiana Family and Social Services Administration letting them know their HIP coverage terminates at the end of the year.
The letter will recommend they purchase private health insurance through Indiana's federally-managed health insurance exchange that goes online Oct. 1.
FSSA Secretary Debra Minott said federal subsidies should enable most of those losing HIP coverage to purchase private insurance for less than they're currently paying to HIP.
The agency will replace those losing HIP coverage with Hoosiers that meet the new income eligibility limit, up to a maximum of 45,000 total participants. To qualify, applicants must not have access to employer-sponsored health insurance and have been uninsured for at least six months.
The slight projected growth in HIP enrollment will barely dent the state's estimated 880,000 uninsured residents.
Pence said about 500,000 of those people will buy subsidized private health insurance on the exchange next year, leaving about 330,000 Hoosiers without any insurance.
The Republican governor suggested uninsured Hoosiers rely on hospital emergency rooms, charity care and local free clinics for their health services.
House Democratic Leader Scott Pelath, D-Michigan City, said most of those people and everyone on HIP would have health insurance if Pence did not refuse to expand Medicaid eligibility as provided by the Affordable Care Act, also known as Obamacare.
"What we're seeing today is something being trumpeted as a success, when in essence it is a complete failure," Pelath said. "The continuation of coverage for a few people does nothing to move Indiana forward, it still leaves these people uninsured."
Pelath said beyond the continued bankruptcies caused by medical expenses that Hoosiers will have to endure, they'll also have to watch as their federal taxes go to support Medicaid expansions in Illinois, Michigan, Ohio, Kentucky and most other states.
"All we need to do is take the tax dollars we're already sending to Washington and insure people with the methods already afforded to us under the law," Pelath said. "They just don't want to do it and they don't have a good reason: it's purely about politics and posturing and has nothing to do with actually making people's lives better."