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Indiana Set to Reform Medicaid, Update Health Plan for Low-Income Residents

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Indiana has gained approval from the federal government to use an updated version of the state's Health Indiana Plan, or HIP, instead of Medicaid.

The updated version will be called HIP 2.0, and it will provide health care to 350,000 uninsured Indiana residents.

Indiana Gov. Mike Pence and the Centers for Medicare and Medicaid Services announced the expansion Tuesday.

"HHS and CMS are committed to working with states to design programs uniquely their own, while maintaining essential health benefits guaranteed under the Affordable Care Act and other key consumer protections consistent with the law," CMS Administrator Marilyn Tavenner said in a released statement.

Before this expansion, the plan covered about 60,000 low-income residents.

Indiana will end traditional Medicaid for all non-disabled Hoosiers between the ages of 19 and 64 and offer HIP 2.0 to low income individuals.

The state will reform its Medicaid program by increasing reimbursement for health care providers. Taxpayers will not have to pay for HIP due to a rate negotiation between the state and the Indiana Hospital Association. The association is helping to fund HIP.

In a press release, Gov. Pence said HIP is a proven model for Medicaid reform across the nation.

"The expanded and updated HIP 2.0 is based on a program that has been serving 60,000 low income Hoosiers in our state for seven years," he said.

Those signing up for HIP 2.0 will have to contribute to a POWER account, which is managed like a health savings account.

If participants fail to pay, they could face mandatory co-pays or lose their coverage.

Individuals who enroll in HIP 2.0 are rewarded for using preventative care. They will have a co-payment if they use the emergency room. 

Low-income residents will have the option of receiving assistance in purchasing a private-market insurance plan through their employer, called HIP Link.

The plan also refers applicants to job training and job search programs offered by the State of Indiana.

Applications for HIP 2.0 are now being accepted. Coverage will begin February 1.