If that headline seems unlikely, rest assured that it’s true. Articles are already popping up around the internet, focusing on the selection of Dr. Tom Price to serve as President Donald Trump’s new Secretary of Health and Human Services. Price, a long-time critic of former President Obama’s Affordable Care Act, has had a great deal of praise for the Healthy Indiana Plan 2.0 that was signed into law by then-Governor Mike Pence – the man who now serves as the Vice-President of the United States. Price’s support for the Indiana version of Medicaid expansion is already drawing criticism from some quarters, as some feel that the law’s requirement that some recipients pay a small premium is too great a burden to bear.
Why the Criticism?
During his recent confirmation hearings, Price was asked about the Indiana Medicaid expansion plan by Indiana Senator Todd Young. His response suggested broad support for the Indiana model, which could be an important factor in determining whether Medicaid expansion will survive any repeal of the ACA and, if it does, what form that expansion might take. Indiana officials have been advertising HIP 2.0 as a model that could be copied in other states.
The expectations that Indiana’s plan could serve as a template for Medicaid reform elsewhere were heightened even more by Trump’s pick of Seema Verma to head up the Centers for Medicare and Medicaid Services. Should Congress confirm her in that role, the Centers will be led by policy consultant from Indiana with invaluable experience in Medicaid reform. She was one of the consultants who helped to shape Indiana’s Medicaid expansion effort.
The criticism of the Indian plan has focused on the HIP 2.0 requirement that those who receive the higher level of Medicaid coverage pay at least something into an account each month. That was Verma’s idea, and was designed to encourage some level of responsibility on the part of those recipients – giving them a reason to make sound consumer choices about how they use their health care coverage. The payments vary depending upon income, but begin at the lowest level of $1 per month, with an upper-tier cost of as much as $26 per month. That is, of course, a tiny fraction of what most families pay for health care insurance each month, but that hasn’t prevented some from criticizing the payment scheme.
Problems with the Co-Pay System
While the co-pay payments to the so-called Power accounts might seem small, recipients who miss payments or cannot make them can find themselves losing some of their coverage. When low-income people fail to make payments, they could get dropped from their comprehensive coverage and end up in the HIP Basic pool – a lesser level of coverage that demands co-pays for things like doctor’s visits and prescription medication. And that Basic coverage provides no insurance for either vision or dental services. For recipients who make between more than the federal poverty limit, the consequences of non-payment are even more dire: they can be prevented from receiving any coverage for the next six months.
Those are obvious weaknesses in the Indiana plan that could provide useful fodder for those who are committed to salvaging the Affordable Care Act as it’s currently written. They will almost certainly point to these defects any time that Indiana’s law is mentioned as a model for the nation, and critics will accuse repeal advocates of wanting to harm the poor. The reality is something different entirely, of course, but the truth seldom gets in the way of an opportunity to score political points.
Other problems with the plan as currently operated are more administrative than structural, so they don’t really offer a reason for criticizing HIP 2.0 as it’s currently structured. Instead, they are problems that need to be ironed out with better training and more attention to detail on the part of administrative staff. For example, there have been problems with seemingly simple matters like tracking recipient payments to the Power accounts – which has resulted in breaks in coverage and denial of legitimate payments to service providers.
Meeting Tomorrow’s Broader Challenges
Many of those problems are the result of HIP’s failure to live up to its own goals. Designed to be a small-government conservative solution to health care, the program is instead a cumbersome administrative behemoth with several bureaucracies layered over the top of one another and smothered with rules. The bureaucratic sandwich involves administrative entities within state government coordinating with similar bureaucratic entities at each of three different insurance companies. It’s natural for mistakes to happen with that much administrative activity, and the only real surprise may be that it works as well as it does now.
With roughly 400,000 HIP 2.0 enrollees, the warning signs are clear. If the program is, as Price seems to suggest, a model that could be replicated in other states across the nation, then it will require retooling to ensure that it more effectively meets recipients’ needs. Administrative activities will need to be streamlined, and greater effort will need to be made to educate the public about how the program works. Above all else, the program must be designed in a way that ensures that families are not stripped of coverage for failing to meet a few-dollar a month contribution. If those things are not done, then we can expect that there will be a wave of politicians in 2020 loudly clamoring for the return of the Affordable Care Act – or an outright rush to single-payer healthcare.
Get the Help You Need
At Frank & Kraft, Attorneys at Law, we’re always committed to remaining on top of important news about Medicaid and other legal issues that affect our friends and neighbors throughout the Indianapolis area. We’re proud to provide state-of-the art estate planning and elder law services to residents in the area, and work to ensure that our clients have the legacy and Medicaid planning they need – as well as other important strategic plans for business, retirement, and financial growth. If you’d like to learn more about how our team can assist you with a wide variety of planning needs, call today at (317) 684-1100, or contact us at our website.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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