Yesterday, Indiana Governor Mike Pence announced a three-year waiver from the federal government to expand Medicaid in his state. (Here) Indiana is the 27th state to expand Medicaid under the Affordable Care Act (ACA) or Obamacare. The program is called Healthy Indiana Plan 2.0 and is a continuation of the one-year plan initiated by Governor Mitch Daniels in 2007.
The basis of HIP 2.0 is a health savings account called a "Power Account" that will be funded by the state government and the Medicaid recipient. Enrollees will be required to pay $3- $25 a month based on income into the account. If they don't make their payments, they will be excluded from Medicaid for 6 months. Medicaid will serve as the major-medical, catastrophic insurance plan.
The governor's office stated that Medicaid should not be a "long-term solution" and that HIP 2.0 "aligns incentives with human aspirations." Funding at the state level will be through an increase in Indiana's tobacco tax and a hospital tax.
Although Medicaid is not financially sustainable and in most cases is no better than having no health insurance (here), the Indiana plan is a step in the right direction. It allows recipients to control their own health care dollars and rewards them for the appropriate use of the health care system. The plan also emphasises that Medicaid should be a temporary entitlement and, like welfare in general, should be a safety-net for those who truly need the help.
