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The Healthy Indiana Plan’s Uncertain Impact

February 7, 2017 at 2:15 PM

Indiana just sent the Department of Health and Human Services (HHS) a plan to extend its Healthy Indiana Plan (HIP) 2.0 — the state’s Medicaid expansion that HHS nominee Tom Price called a model for other states — for three years. But HHS should first determine whether HIP 2.0 has furthered Medicaid’s objective of improving the delivery of health care to low-income people, which it’s supposed to do as a demonstration program authorized under section 1115 of the Social Security Act.

The big question is how HIP 2.0’s particular features, especially its premiums and cost-sharing, which vary from normal Medicaid rules, affect coverage and access to care. Under HIP 2.0, most people who don’t pay premiums are shifted from the “Plus” to the “Basic” plan and, as a result, must pay co-payments when they get care.

While HIP 2.0 has provided Medicaid coverage to almost 400,000 Hoosiers — 60 percent of whom were previously uninsured, according to the state — we don’t know whether more people would have gained coverage under an expansion that didn’t charge premiums, which tend to discourage low-income people from participating in health coverage programs.

More importantly, we don’t know how HIP 2.0’s design affects the one-third of HIP enrollees in the Basic plan. Research shows that cost-sharing keeps low-income people from getting necessary care. That seems to be happening in HIP 2.0, an evaluation of the program’s first year suggests. Compared to people in Plus, enrollees in Basic are less likely to get primary and preventive care, less likely to adhere to prescription drug regimens for chronic conditions such as asthma and heart disease, and likelier to use the emergency room (including for non-emergency care). Moreover, half of African American beneficiaries, who already experience serious health disparities, are in Basic.

Indiana’s proposal to extend HIP 2.0 focuses on the fact that Plus enrollees are getting more needed care. But nothing in the interim evaluation of HIP 2.0 proves that they’re doing so because they’re paying premiums. It’s at least as likely that they’re getting more care because they don’t have to pay the co-payments that Basic enrollees must pay.

If co-pays are hindering Basic enrollees from getting needed care, this aspect of the demonstration shouldn’t continue. We need to understand why people in Basic are doing worse than those in Plus — and how to help them do better — before extending HIP 2.0 in Indiana or replicating it in other states.


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