INDIANAPOLIS — Katie Josway is a liberal musician and massage therapist in a conservative state that gave her health care coverage two years ago. She has to make monthly payments and can lose her plan if she misses one. She’s fine with that.
There’s a “common misperception” that people who need government assistance are looking for a handout, she says.
“We are all doing the best we can,” says Josway, who turns 31 Wednesday. “Instilling a little bit of accountability and cutting people a break where needed will lead to a better functioning and happier society.”
Far more people may also have to adjust to the new reality of formerly free health coverage through Medicaid: It will cost money. As once-reluctant Republican governors consider expanding Medicaid under the Affordable Care Act (ACA) to their lowest income residents, the Medicaid plan developed by the now-head of the Centers for Medicare and Medicaid Services (CMS) and approved by former Indiana governor, now Vice President, Mike Pence is the one many are expected to model.
“A lot of people think there are a lot of good things in there,” says Tim Costa, who worked for former Republican governors of Rhode Island and Pennsylvania on their Medicaid plans. “It’s a smart thing to look at.”
The work requirements and higher cost sharing that were rejected by President Barack Obama’s administration may be easily approved in the Trump administration. The Obama administration did approve the Indiana plan that allowed the state to expand Medicaid, on the terms that were more politically palatable there. Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma said last month that states will have “more freedom” to design Medicaid programs that best suit their recipients’ needs.
More states would have expanded Medicaid to all of its residents making close to the federal poverty limit — $24,600 for a family of four — if the last administration had been as flexible as the new one appears ready to be, says Costa. Currently, 19 states have declined to expand Medicaid under the Affordable Care Act, despite a federal pledge to cover 90% of the cost of care for people in this population.
Other states cited a variety of reasons for not expanding Medicaid, including that they didn’t want to take on higher costs when the federal government’s match decreased.
What makes the Healthy Indiana 2.0 plan different:
• Payments. Recipients pay between $1 and 2% of their income into a type of health savings account that is then used for some out-of-pocket costs. The accounts, called Personal Wellness and Responsibility or POWER accounts, sound good but about half of the states’ recipients aren’t even aware they have the accounts, according to a survey of recipients conducted by the Lewin Group for the state. The payments are supposed to be an incentive for patients to use health care services more wisely. But depending on their income, patients who don’t pay their monthly contributions are either temporarily locked out of the system or have to make co-payments and get fewer benefits.
• Reimbursement. Doctors and hospitals are paid at the higher Medicare rates to encourage more to accept Medicaid patients. The Medicaid program has traditionally paid health care providers the least for services, which has led to a shortage of doctors willing to treat patients on the program. Indiana state Rep. Ed Clere, a Republican, questions whether the state will be able to keep affording these higher rates, however.
• Work. The state sought to make working a requirement, but was rebuffed under the Obama administration. Instead, job training is offered to recipients but isn’t mandatory. Gov. Eric Holcomb, who replaced Pence, did not ask to include a work requirement in his request to extend the plan for three more years, but said he was focused on trying to address the opioid epidemic first. The Kaiser Family Foundation reported last year that 59% of all Medicaid beneficiaries who were not receiving disability payments were working. If they weren’t, they were either sick, taking care of a family member or in school. Even what seems like a small increase in working recipients could make a big difference in the cost of the program, says Costa, now with the law firm Buchanan, Ingersoll & Rooney
Clere is a bit of a skeptic when it comes to his state’s conservative approach to Medicaid. Instead of paying as little as a dollar a month into confusing POWER accounts, he says he’d rather see recipients get incentives to quit smoking or manage their diabetes, which would have a much greater impact on the people and the state’s budget
“Most people agree personal responsibility should be a focus,” says Clere. “There are lots of ways to demonstrate personal responsibility and financial responsibility is only one way.”
Susan Jo Thomas, who describes herself as a liberal former civil rights protester, says she “has had to reconcile my ideologies with what is practical and workable in this state.”
“Yes, it’s complicated, but compared to what we had before, which was nothing, absolutely it is working for us,” says Thomas, executive director of Covering Kids & Families of Indiana. “We have 427,000 Hoosiers not with just minimal coverage, but with really good coverage now.”
Aviva Aron-Dine, who was a senior counselor to former Health and Human Services secretary Sylvia Burwell, says plans like Indiana’s are supposed to “advance the goals of the Medicaid program,” but she says “I don’t see any evidence that they do.”
Thomas disagrees.
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“Daily we hear from Hoosiers who are reduced to tears of gratitude because they have access to care they didn’t have before,” says Thomas. “At the end of the day, it’s far better for a hungry person to have three quarters of a loaf of bread rather than no bread at all.”
Josway is grateful to have insurance, having gone without it for about a year after she left a “soul sucking” job at an insurance company. While she’s willing to contribute more or less depending on her earnings, she believes that it’s government’s role to help care for its citizens.
“What is the point of government other than the social contract?,” she asks. “We all take care of each other.”
Meanwhile the jury is still out on whether Indiana’s approach, Healthy Indiana Plan 2.0, is more effective than traditional Medicaid at keeping people healthy and lowering costs.
Legislation sponsored by Clere would have required far more data on the plan, but it failed, which he says suggests some were “afraid of what the answers would be.”
“If you’re another state looking to design a program, you have to be careful about where you place emphasis and to make sure it’s based on the evidence,” says Clere. “Indiana has a very strong program in many respects, but there are still unanswered questions.”
What’s your health care experience? Tell us at healthinsurance@usatoday.com
Contributing: Maureen Groppe