Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.
Days until marketplaces launch: 27.
Michigan is the latest state to back the health law's Medicaid expansion, bringing the total of states opting-in to 25. Could neighboring Indiana be next?
The state isn't currently on board and, on Tuesday, finalized a deal with the federal government that will just barely increase cover in the Hoosier State. But coming out of those negotiations, state officials and experts think there could be space for Indiana and the federal government to carve out a full Medicaid expansion–one that stands to look significantly different than other state plans.
"Our experience in obtaining this waiver renewal was very collaborative, but I don't know how to predict what the next discussions will be like," says Debra Minott, secretary of the Indiana Family and Social Services Administration. "My reaction is that this was a positive experience, where I felt like both sides were negotiating in good faith. I hope this will be the same thing."
Indiana has, since 2008, operated a program called Healthy Indiana Plan, or HIP. It has served low-income adults who don't qualify for the traditional Medicaid program, enrolling about 45,000 people in something that's supposed to look like a health savings account.
"As part of these plans, they set up a Power Account," Minott explains. "That is intended to have $1,100 in it. The enrollee will contribute 2 percent of their income, and the state contributes the rest. They use that Power Account to cover their health care expenditures."
When enrollees run through that account, Minott says, "the rest of their care is covered" at no cost. The whole idea is to create some kind of buy-in for participants, something akin to the premiums that subscribers pay for their private insurance coverage.
Indiana Gov. Mike Pence (R) has repeatedly stated that any Indiana Medicaid expansion would have to look something like HIP, with a consumer-driven element, requiring all enrollees to have some buy-in to their health care costs.
That didn't happen this year. Instead of working out a Medicaid expansion, Indiana extended HIP for a year. The state did make one notable change: It lowered the income cap from 100 percent of the federal poverty line. Anyone above that will be moved over to the marketplace, where they will receive subsidies to purchase private insurance,
Minott estimates this will open up about 11,000 spots in HIP, which has an enrollment cap that hovers around 45,000, a number determined by the amount of cigarette taxes the state brings in.
This is not the Medicaid expansion that health advocates had wanted. Since there's a cap on HIP, it has the possibility of leaving out low-income Indiana residents who would want coverage. That means that Indiana does not get the 100 percent federal match for covering people under HIP, that applies to states expanding Medicaid. Instead, it receives its regular match of 67 percent.
"It's better than nothing, and I absolutely applaud that they kept HIP so we don't have 37,000 uninsured," says David Roos, executive director of Covering Kids and Families of Indiana. "We're surrounded by states that have found a better way to do it. I wish they would have gone with a more plain vanilla expansion."
The big question in Indiana is whether this decision represents a first step in moving toward a complete Medicaid expansion–or a final rebuff. There's pretty universal agreement that HIP, as its structured now, can't be an Obamacare Medicaid expansion. That's because it limits who gets to sign up for the program; a Medicaid expansion would need to be eligible to everyone below 133 percent of the poverty line (just about $15,000 for an individual).
"There's an enrollment cap," says Joan Alker, executive director of the Georgetown Center for Children and Families. "That's a major issue that I don't think would be acceptable going forward."
Minott, who runs Indiana's Medicaid program, agrees. "There clearly would not be an enrollment cap in the expansion," she said.
The bigger question is whether Indiana and the federal government can come to some agreement on the state's more consumer-driven cost-sharing. Alker says that while the federal government has generally frowned upon charing low-income Medicaid enrollees premiums, there could be a way around that. While the enrollment cap is a deal breaker, cost sharing leaves more flexibility for negotiations.
"Premiums under poverty is something that [The Center for Medicare and Medicaid Services] has drawn a pretty firm line on," she says. "But you can do cost-sharing. What you call it, and how you structure it, is what's going to be debated and negotiated."
Minott is pretty explicit, just as Pence has been, about having Hoosiers make some kind of contribution to their health care if they participate in the Medicaid expansion. But she also says the state is interested in getting to yes with the federal government.
"The next task to do is to actually speak to them about using HIP for expansion," she says. "If I had to look at all the design features, one thing that cannot change is you have to something that looks like a health savings account, where the consumer is going to make contributions. That's going to be very key to us."
KLIFF NOTES: Top health policy reads from around the Web.
Minnesota is talking much about Obamacare as they market their exchange. "Minnesota, along with thirteen other states and Washington, D.C. that are fully running their own health-insurance marketplaces, is marketing this way because it believes it will draw customers, even if it doesn't change popular impressions of Obamacare, the health overhaul designed to provide coverage to those who don't have it from their employer or elsewhere." Jennifer Corbett Dooren in the Wall Street Journal.
Twenty-one states have banned abortion coverage on their marketplaces. "State legislatures from Alabama to Pennsylvania to Wisconsin dusted off the anti-abortion playbook of the 1980s to pass laws that prohibit health insurance companies from including abortion as a covered service, beyond exceptions such as protecting a pregnant woman's life. In some states, women theoretically are permitted to buy separate coverage for abortion, but abortion rights activists say such plans are impossible to find." Jeff Young in the Huffington Post.