Truth
The focus following Gov. Mitch Daniels' announcement of how the state plans to expand health insurance to employed Hoosiers has been on his proposal to raise the cigarette tax.
While that is a significant component of the plan, what is also noteworthy is the administration's success in finding a way to fund the program.
Daniels will bring to the Legislature and the federal government a plan that creates a public/private partnership for health insurance for the working poor (those making up to 200 percent of the federal poverty level or $40,000 per year for a family of four). It will be portable and require prevention and personal responsibility on the part of the insured.
It is attractive because it's not an entitlement program. The insured will be required to pay, on a sliding scale, no more than 5 percent of their income annually. They'll be asked to take charge of their own health care decisions and be given incentives to look for cost savings in areas such as prescription drugs.
The state will establish a health savings account, called a POWER account, in each participant's name and contribute, with the insured, a combined $1,100 for initial medical expenses. Up to $500 in preventive screenings, such as annual physicals, mammograms, cholesterol tests, nicotine patches and prostate exams, will be free.
There is good news and bad about the proposal and, unfortunately, it lies in the same number -- 120,000. That's the number of additional, uninsured, employed Hoosiers who the state will be able to pick up with a 25-cent increase in the cigarette tax. (Additional finances are proposed to come from current programs and the federal government.) There are about 350,000 people eligible to participate, however. A 50-cent increase would pick up 200,000 people, so regardless, there will be a gap in coverage.
The increase in the cigarette tax also would pay to bring Indiana's smoking cessation programs up to the levels recommended by the Centers for Disease Control and Prevention (an additional $24 million), and to expand vaccinations for children ($11 million). "One-hundred percent of raising the cigarette tax goes to health care," said Mitch Roob, secretary of the Family and Social Services Administration. That was a criteria for many lawmakers who were skeptical about a cigarette tax increase in the last Legislature.
"We think we can take a big chunk out of the problem of the uninsured here, but we don't solve every problem," Roob said.
The secretary said Daniels' charge was to look at the values that were important from a health-care perspective and create a program to fit those criteria. The most important value, he said, was "promoting healthier Hoosiers," since Indiana residents smoke and eat too much.
We're optimistic about the governor's plan, although we hope FSSA will be able to increase the number of uninsured to be covered. It's in the hands of the Legislature now and members will have to act in this session in order for the program to meet the target of January 2008. The federal government will have to approve waivers as well, but initial reaction from federal officials has been positive, Roob indicated.
Since both parties have health care on their radar for this session, hopefully this plan will be a good starting point for discussion.