Indiana is 28th state to expand Medicaid under ACA

Indiana will become the 28th state, plus the District of Columbia, to expand Medicaid under the Affordable Care Act (ACA).

Indiana’s plan establishes POWER Accounts that allow beneficiaries to pay for some healthcare expenses. These accounts will be funded, in part, through beneficiary contributions.

RELATED: Alabama, Alaska, Florida, Tennessee and Wyoming moving forward with Medicaid expansion.

Beneficiaries will have access to all the essential health benefits required under the law.  The agreement allows two benefit packages (HIP Plus and HIP Basic) to cover all essential health benefits required by law and to be available to people based on their premium (POWER Account) contributions.

Individuals charged with premiums (in the form of POWER Account contributions) will enroll in HIP Plus and will have no other cost-sharing except for some emergency room services. These individuals will also have the opportunity to reduce their premiums through incentives like receiving preventive care or through a rollover of their POWER account. For people with incomes at or under 100% of the federal poverty line who elect to pay cost-sharing rather than premiums, cost-sharing will comply with regular program limits; total cost-sharing will not exceed 5% of the family income.

“The waiver shows some degree of new flexibility from the Obama Administration, which has been reluctant to approve waivers that cross certain ideological third-rails important to the President’s liberal political base,” says Kip Piper, MA, FACHE, an advisor with Sellers Dorsey, a Medicaid consultancy in Washington, D.C., and a former state and CMS official who advises states, health systems and health plans.

“The opening is narrow - and only time will tell - but a few more states may entertain waiver-based expansions should HHS be more flexible and less doctrinaire in areas of keen interest to many governors and state legislators,” Piper continues.

Greater flexibility by the Obama Administration will be critical as states consider possible state-based health reform models under section 1332 of the ACA, which allows states to seek waivers of key features of the ACA, Piper explained.

“There are major hurdles to pass for these waivers and they can be effective no earlier than January 2017, but some states will be thinking about their options this year,” he says. “ACA waiver applications will likely include Medicaid or even Medicare waiver requests.”

Waivers like this tend to draw out critics on the two wings of the spectrum, the far-left and the far-right, according to Piper.

“I call it the ‘tastes great / less filling’ debate,” he says. “The left distrusts states, prefers top-down federal solutions and dislikes placing expectations, even nominal or symbolic, on low-income enrollees, even non-disabled, working adults with no children, in exchange for government benefits. The right distrusts the federal government, prefers state-based reforms, and wants to support some degree of self-responsibility and avoid making people dependent on government. Now throw in the optics and policies of the ACA and the nuances and complexities of waivers, and you have a lively ideological food fight.”

RELATED: Two GOP-led states receive approval for Medicaid expansion cost-sharing provisions

The HIP 2.0 waiver includes several ground-breaking features, such as limited, nominal cost-sharing for those below 100% of poverty and modest premiums for those desiring added optional services like dental coverage.

“Quite unique is the financing of the state’s share of coverage once federal funding goes from 100% to 90% after 2016,” Piper says. “Facing huge Medicare and Medicaid payment cuts under the ACA, the hospital industry has agreed to repurpose existing assessment-funded Medicaid payments to help cover the state’s costs. The hospitals will gain through better Medicaid and HIP 2.0 rates and fewer uninsured patients. It’s quite forward-looking by the hospital industry and fiscally savvy by the state. This partnership could be used in other states such as Tennessee.”