Indiana Gov. Mike Pence, a Republican whose name has recently been thrust into 2016 presidential speculation, unveiled on Thursday a plan to expand healthcare coverage to low-income people in Indiana.
Pence is opposed to the Affordable Care Act and has rejected the law’s expansion of the federal Medicaid program. The coverage expansion in Indiana is a nod to Obamacare’s Medicaid expansion, but Pence attempted to cast it in terms more palatable to conservatives.
Overall, he’s attempting to walk a fine line between earning hundreds of millions of dollars in federal support and maintaining support from fellow conservatives. Pence said his plan, an upgraded version of the Healthy Indiana Plan, will balance the two by requiring patients applying for coverage to take more personal responsibility for their insurance.
Pence’s office said the strategy, which would replace the traditional Medicaid program for people ages 19 to 64 with incomes up to 138 per cent of the federal poverty level, would provide coverage to more than 350,000 Hoosiers.
This would help alleviate what is known as the “coverage gap” in the state. Overall, according to the Kaiser Family Foundation, more than 4.8 million Americans sit within the gap of having incomes too high to qualify for traditional Medicaid coverage but too low to qualify for subsidies through insurance plans under the exchanges.
But Pence took pains to make clear what he sees as a clear distinction between his plan and expanding Medicaid.
“From the beginning of my tenure as Governor, we have been saying ‘no’ to the Affordable Care Act in Indiana. We refused to set up a state-based exchange, and we have made it clear that we will not expand traditional Medicaid,” Pence said in announcing the plan Thursday.
“Medicaid is not a program we need to expand. It is a program we need to change. Nobly created 50 years ago to help the poor and those with disabilities access quality health care, Medicaid has morphed into a bureaucratic and fiscal monstrosity that does less to help low-income people than its advocates claim.”
Pence’s plan flows with many other red-state or Republican-governor coverage expansions. Hoosiers with incomes below the federal poverty level can either pay a small monthly premium or be dropped to a more basic level of coverage without dental and vision benefits. Those making above the poverty level must pay a monthly premium or be dropped from the coverage for at least six months.
Here are the three basic tiers:
- HIP Plus — This is the highest level of coverage, which requires monthly contributions of between $US3-$25.
- HIP Basic — A lower level of coverage that only requires co-payments, not monthly contributions.
- HIP Employer Benefit Link — This type of coverage aids Hoosiers in payments for private plans through their employers. Pence said it would “encourage the use of private insurance options.”
Pence now plans to submit a final waiver proposal to the federal government to harness billions of dollars of federal money. He is expected to do that by the end of June, after the state holds hearings and the two required “comment periods.”
The Obama administration must then approve the waiver. Though the administration didn’t immediately signal its intentions, one official referenced the administration’s collaboration with Arkansas on its “private option” expansion.
“Just like we worked with Arkansas and other states on a unique plan, we look forward to doing the same with Indiana once they submit a formal proposal,” the official told Business Insider.
In a statement, Department of Health and Human Services spokesperson Emma Sandoe said the administration was “encouraged” by the developments on Thursday. If approved, Indiana would be the 27th state, along with the District of Columbia, to expand coverage for people who would have been covered under the law’s Medicaid expansion.
“We are encouraged by Indiana and Governor Pence’s commitment to helping cover more of the state’s uninsured population through the Healthy Indiana program and look forward to seeing his proposal,” Sandoe said.
“The Medicaid coverage expansion provides federal funds to cover 100% of the cost of newly eligible beneficiaries for the first three years and no less than 90% after that. In Indiana, it would mean coverage for thousands of additional Hoosiers.”
This post was originally published at 5:55 p.m. on Thursday.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.