Gov. Pence gets federal OK for Medicaid alternative

Jan. 27--Indiana has been given the green light to expand its Healthy Indiana Plan, which would offer insurance to an additional 350,000 Indiana residents who currently lack insurance.

The state will begin taking applications immediately for its so-called HIP 2.0 plan, for which coverage begins Feb. 1, Gov. Mike Pence announced Tuesday morning at a packed speech at St. Vincent Health.

His announcement culminates more than two years of back and forth between state government and federal health officials over whether to grant the state a waiver for the plan, which debuted in 2006.

Indiana is the only state to apply private market measures, such as requiring participants to make monthly contributions to help cover the benefit.

Anyone who falls below 138 percent of the federal poverty level will now be eligible to enroll in what the state is terming the Healthy Indiana Plan Plus. The plan includes dental and vision benefits, as well comprehensive prescription drug benefits.

Participants in this plan will be expected to make contributions of between $3 and $25 per month, or about 2 percent of the annual income for the year.

Those who fall in this pool and have already enrolled in an insurance plan on the Health Insurance Marketplace will now be contacted and asked to enroll in HIP Plus, state officials said. Those who do not do so could face a tax penalty.

If a person on this plan who falls below 100 percent of the poverty fails to make his or her contribution, he or she will be moved to a basic plan that requires co-payments for all services, something not seen on the Plus plan and which will reduce the person's benefits.

The plan contains other measures that fit with its original philosophy of placing some of the burden of the cost of health insurance on participants. For instance, the first non-urgent emergency room visit will incur a copay of $8; the second, $25.

Funding for the plan would come from cigarette tax revenues as well as from the hospital assessment fee.

Call Star reporter Shari Rudavsky at (317) 444-6354. Follow her on Twitter: @srudavsky.

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