Healthy Indiana Plan is an improvement over traditional Medicaid.
There's an old saying that without our health, we have nothing. I'm sure most of us agree with this sentiment, and hold our health and the health of our loved ones above all else. Ensuring that Hoosiers have access to high-quality, affordable health care is one of the most important causes of our time–and one of the most challenging.
At the federal level, President Obama's health-care reform law, known as the Affordable Care Act (ACA), was passed with the goal of improving access to health care. The law's primary means of expanding access for low-income Americans is to expand eligibility in the Medicaid program to everyone who makes up to 138 percent of the federal poverty level, which is currently about $32,500 a year for a family of four.
The problem with the ACA's approach is that Medicaid is an outdated program with a poor track record of encouraging participants to live healthier lives. The goal of Medicaid is admirable, but it simply hasn't given Americans a good return on the billions of tax dollars invested in the program. Fortunately, when the Supreme Court ruled on the ACA last year, it gave states the option whether or not to expand Medicaid. That gives forward-looking states like Indiana more leverage to use our own program in the hope that the federal government will help us fund it as a substitute to Medicaid expansion.
Here in Indiana, state leaders developed a health-care program in 2008 called the Healthy Indiana Plan (HIP) that corrects some of Medicaid's shortcomings. HIP is open to certain childless adults who don't qualify for traditional Medicaid, and it's funded by a mix of state and federal funds under a Medicaid waiver. It's possible that Indiana will be able to expand HIP to more people under the ACA, but if the federal government doesn't approve that decision, then federal funding for HIP might stop completely, forcing the state to end the program.
HIP is an improvement over Medicaid because it recognizes a simple fact of life: People make more responsible decisions if they have some “skin in the game” for the consequences. HIP participants get regular commercial health insurance with state support to meet their deductibles, meaning the program is affordable, but it isn't free like many Medicaid services. The most any HIP enrollee must contribute is 5 percent of his or her income. But simply forcing enrollees to think about the financial ramifications of their health-care decisions–as those of us with private health insurance do–means they seek care more efficiently, and have more incentive to make healthy lifestyle choices.
Expanding HIP instead of regular Medicaid could bring about significant savings for Hoosier taxpayers, but because of the number of people that would be covered by expansion–an estimated 300,000 to 500,000 Hoosiers–it will still be an extremely expensive move for our state.
Because the cost is so great, Indiana officials don't have much interest in expanding a broken system like regular Medicaid. If we get federal permission to expand HIP instead, there will still be tough budgeting decisions to make to figure out how Indiana will pay for it. It's unfortunate that the ACA's one-size-fits-all approach means Indiana might have to end HIP altogether, but I'm hopeful that Indiana will find a way to expand HIP so that we can lead the way for other states to enact responsible health-care reform.
Ed Charbonneau is a Republican state senator from Valparaiso.
