For the first time in years, Victor and Michelle Lee have health insurance. The West Terre Haute couple is covered by an expansion of Medicaid made possible by the Affordable Care Act.
As Congress weighs future health insurance policy, the Lees hope their coverage continues for a long time.
“For him, it’s a matter of life and death,” Michelle said, explaining that Victor has COPD and heart disease. “It’s very important for us to be able to afford it.”
The Lees, whose income solely from Michelle’s $1,600 per month job, make monthly contributions of $16.50 each to a Personal Wellness and Responsibility Account, dubbed a POWER account, under an optional upgrade of the Healthy Indiana Plan known as HIP 2.0 Plus.
People making up to 138 percent of the federal poverty level, $22,100 per year for a couple, are eligible. POWER accounts cover the first $2,500 of eligible expenses. The state pays most of the $2,500 and subsidizes managed care programs that provide coverage. Employers or non-profit organizations can make contributions for those enrolled.
While Healthy Indiana dates to 2008, former Gov. Mike Pence launched HIP 2.0 in 2015. With Pence now vice president, many Republicans point to the program as a national model, and it’s getting attention from researchers.
The program is unique because “the federal government has not been very flexible in what it has allowed states to do regarding engaging patients,” said Amy Lischko, associate professor of health and community medicine at Tufts University School of Medicine.
“It may be too early to know whether what Indiana has designed will work, but other states are watching and it is likely we will see similar approaches in the future,” Lischko said.
Indiana has applied with the federal government to continue HIP 2.0 through 2021 and Joe Moser, the state’s Medicaid director, is optimistic.
“Healthy Indiana was in place before ACA,” he said. “We think HIP 2.0 will continue after repeal of ACA regardless of what happens in Washington.”
The state is using the program “to try to get the consumer the private sector experience and educate them about having insurance,” Moser said. “The goal has always been to move people ... onto private insurance if they can get coverage through their employer.”
People with a financial interest in their own health care are better consumers of health care services, he said. In the program’s first year, 86 percent of those in HIP 2.0 Plus received a preventive service, compared with 62 percent of those on the basic plan.
Because the program is a form of private insurance, those enrolled “have less incentive to keep incomes low to remain in public coverage,” said Lischko.
About 415,000 Hoosiers are covered by HIP 2.0, an increase of more than 70,000 from last year. More than half of those leaving the program do so because their incomes increase or they gain access to private insurance, according to the state’s application for an extension. In total, more than 1.4 million Indiana residents - about 21 percent of the state’s population - are covered by Medicaid, including Healthy Indiana and the Children’s Health Insurance Program.
Nearly 175,000 in Indiana obtained coverage through the healthcare marketplace for 2017, about 13,000 fewer than 2016.
Health savings accounts
POWER accounts are a form of Health Savings Accounts which many in Congress tout as one component, perhaps a major component, of a new national health care policy.
“Health Savings Accounts are not a magic bullet. However, I believe they are an important tool for patient engagement at all income levels,” said Lischko. “While it is true that traditional HSAs have a greater tax benefit for middle-to-high earners, there are strategies that can be implemented so they benefit lower-wage earners.”
Leshko notes that Hoosiers who contribute to POWER accounts gain more comprehensive benefits and lower cost-sharing than beneficiaries who do not.
“HSAs must be coupled with better real-time information around the costs and quality of providers and additional education for patients. I believe there will be technological advances in the near future.”
Some ACA goals, affordability elusive
Researchers at Indiana and Cornell universities found that Americans are taking more steps to prevent disease thanks to provisions of the ACA. Low income adults without children are 17 percent more likely to have health insurance, 7 percent more likely to have a personal doctor and 11 percent less likely to cite cost as a barrier to health care.
“Medicaid expansions under the ACA succeeded in some of their goals, but other goals remain hard to achieve,” said Kosali Simon, a health economist at Indiana University’s School of Public and Environmental Affairs. “There’s been no detectable reduction in obesity, smoking or heavy drinking, at least through our study period.”
It’s no secret that Americans like ACA requirements that insurance covers pre-existing conditions, provides free preventive care and contraceptives and has no lifetime limits but “that all makes health care very expensive,” Simon said.
“It is impossible to have insurance that is comprehensive, covers everything and everybody, pays hospitals enough and pharmaceutical and medical device companies are comfortable with and is cheap,” Simon said. “There is no magic bullet that makes health care cheaper.”
While thousands of Hoosiers gained health care, thanks to what Simon termed “very generous” subsidies for families of four making up to $100,000 per year, there are still those who fall through the cracks or maintain coverage is still too expensive.
While there is talk about market-based reforms, Lischko said, “I don’t think government or the market has all the answers. Some combination of government and market reforms makes the most sense for a lot of reasons. We’ve seen them both fail in certain areas and they each have a role to play in ensuring the health care is delivered efficiently and equitably.”
Hospital concerns
After investing heavily in buildings and technology, hospital officials are keeping a wary eye on Washington.
“We’re really concerned if the law is repealed and not replaced immediately because some 20 million people gained coverage and that’s been a benefit to patients and hospitals,” said Doug Leonard, Indiana Hospital Association president. “That really changes the fortunes of the hospital, if you will. If we were caring for 20 million people without insurance, the cost has to be passed on to other payers.”
The law has shifted hospitals from a fee for service approach to population-based care with Accountable Care Organizations that accept responsibility for groups of Medicare patients and are obligated “to do only that which is necessary at the most reasonable site and the most reasonable cost,” Leonard said.
“You get all the data for what every one of those patients cost Medicare last year,” Leonard said. “If you can provide care for them at less than the total cost the year before that creates the opportunity for financial gain for the group running the ACO (accountable care organization).”
The health care law has been good for Hoosier hospitals, Leonard said. While 80 rural hospitals around the country have closed since is passage, none have been in Indiana. He said Indiana’s Medicaid expansion and HIP 2.0 has been “very beneficial to hospitals, including rural hospitals, many of whom say they wouldn’t have a bottom line if it weren’t for the (Healthy Indiana) program.”
While there is uncertainty from living rooms to hospital board rooms, some dare to dream that Congress comes up with something that improves on existing policy.
“We’re hoping that the ACA replacement will be better than the current law,” said Moser, the state’s Medicaid director.