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General Assembly

Pence spurns Medicaid expansion

GOP asking to broaden Healthy Indiana Plan instead

– Gov. Mike Pence and GOP lawmakers rejected efforts Wednesday to expand traditional Medicaid coverage in Indiana, instead seeking federal permission to use an existing state program that requires participants to share costs.

Similar efforts with the federal government have failed in the past, and Democrats said Indiana needs to take advantage of the billions of dollars the Affordable Care Act promises for covering up to 400,000 currently uninsured Hoosiers.

If not, these people would fall into a gap between the state’s current health insurance program for the poor and those that would be eligible for tax credits to buy health insurance on public exchanges.

Currently, Indiana Medicaid covers only Hoosiers that make up to $11 a day.

Committees in both the Republican-controlled House and Senate considered the topic Wednesday, and Pence also provided his input.

“Medicaid is broken,” the governor said. “In Indiana, an expansion of traditional Medicaid under the Affordable Care Act would cost our taxpayers upwards of $2 billion over the next seven years.”

In a letter to Health and Human Services Secretary Kathleen Sebelius, Pence requested federal approval to use the state’s Healthy Indiana Plan, known as HIP, to serve an expanded Medicaid population instead.

Healthy Indiana features health savings accounts and cost-sharing by participants, as well as a focus on preventive services.

Previous efforts by Gov. Mitch Daniels on this same point failed, and the HIP program is set to end at the end of this year.

Other governors around the Midwest are opting for the expansion, but legislative Republicans in Indiana have pointed to cost as a major burden.

An estimate from the state actuary estimates the cost of the expansion to the state from fiscal year 2014 through fiscal year 2020 at about $2 billion. The bulk of those costs come in the later years because the federal government pays initial costs and then reduces its commitment.

But the Indiana Hospital Association estimates the cost to the state to be much lower – about $500 million during that time period.

And Democrats point to millions the state spends on the Healthy Indiana Plan from the cigarette tax, as well as funding for a high-risk insurance pool, that could be put in a trust fund to start preparing for the new costs.

“We think it’s important that we not delay in providing adequate coverage,” said Sen. Jean Breaux, D-Indianapolis.

A Senate health panel rejected Breaux’s attempt for a full Medicaid expansion under Affordable Care Act rules, but accepted a proposal by Sen. Patricia Miller, R-Indianapolis, to push the federal government for a waiver using HIP as a vehicle.

“I think it’s worthy of asking the folks in Washington to allow us to expand our plan,” Miller said. “We would like to negotiate.”

A House panel passed similar legislation allowing for an expansion only under the HIP program.

Supporters testified repeatedly Wednesday that it would be a bad move to allow federal tax dollars paid in Indiana to be funneled to other states while Indiana gets nothing.

Paul Chase, from Covering Kids & Families of Indiana, said lawmakers are taking a risk in asking for a different response from the federal government, and it could cost Hoosiers coverage.

“Medicaid expansion is a deal too good to pass up,” he said, then adding that thousands of jobs would be added to the economy under an expansion.