Indiana is the first state to implement a major Medicaid coverage expansion using a health savings account model. The Healthy Indiana Plan (HIP), which began January 1, 2008, is designed to cover up to 130,000 uninsured residents. [1]
HIP is open to any Indiana resident ages 19 to 64 who earns less than 200 percent of the FPL, has been uninsured for at least six months, is a U.S. citizen, does not have access to employer-sponsored health insurance, and is not eligible for Medicaid or Medicare. Indiana's existing Medicaid program, called Hoosier Healthwise, restricts income eligibility for non-disabled adults to no more than 22 percent of the FPL—nearly the lowest coverage limit in the U.S. HIP is intended to fill the gap in coverage between Medicaid and private insurance.
HIP provides a Personal Wellness Responsibility (POWER) Account valued at $1,100 per adult per year to pay medical costs. Contributions to the account are made by the state and each participant. Participants pay into the account on a sliding scale up to 5 percent of gross family income, with monthly contributions ranging from $0 to $85 for childless adults and $0 to $105 for a family of four.[2] Up to half of the participant's contribution may be paid by an employer withholding after-tax payroll dollars on the participant's behalf. A new state trust fund contributes any difference between the individual's contribution and $1,100. The trust fund is financed by an increase in cigarette taxes, expected to contribute $129 million for HIP in 2008 and $144 million in 2009.
A basic commercial benefit package covers medical costs that exceed $1,100. Preventive benefits are free up to $500 annually. HIP provides a financial incentive for enrollees to receive state-recommended preventive services: if all age and gender appropriate preventive services are completed, then all POWER Account funds remaining at the end of the year (including state and individual contributions) roll over and offset the next year's contribution; if not, then only the individual's contribution rolls over (not the state's).
HIP, which required a federal waiver and will receive federal matching funds, is one component of Indiana's 2007 "Check-Up Plan." The Check-Up Plan also includes a Medicaid expansion for pregnant women with incomes up to 200 percent of FPL; an extension of SCHIP coverage for children in families with income up to 300 percent FPL (pending); expanded child immunizations, provider payment increases; tobacco cessation and other health initiatives; extension of dependent coverage to age 24; a small business qualified wellness program tax credit; and a tax credit for small employers to establish Section 125 plans.
|
References
[1] HIP is not considered an entitlement, and total enrollment is limited by available funding.
[2] Participant contributions are capped at: 2 percent of the individual's annual household income if the household income level is below 100 percent of the FPL, 3 percent if income is between 100 percent and 125 percent of the FPL, 4 percent if income is between 125 percent and 150 percent of the FPL, and 5 percent if income is between 150 percent and 200 percent of the FPL.