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AIS's Health Business Daily
Featured Story August 5, 2008 Account-Based Healthy Indiana Program Expands With a Buy-in Option Reprinted from INSIDE CONSUMER-DIRECTED CARE, a biweekly newsletter with timely news and insightful analysis of benefit design, contracts, market strategies and financial results. By Bruce Goldfarb, Editor, (bgoldfarb@aispub.com) About 13,000 adults have enrolled in the Healthy Indiana Program (HIP) — the first Medicaid program in the country with high-deductible coverage and a health savings account (HSA) — since it launched on Jan. 1, according to a summary of the program just released by the Kaiser Foundation on Medicaid and the Uninsured (KFMU). And the program is in the process of getting much bigger with this month's start of a buy-in option for people who exceed income limits for the subsidized program, HIP is managed by the Indiana Family and Social Services Administration (FSSA), and the agency was overwhelmed by the public response when applications began to be accepted in December 2007. The HIP program "is still fairly new, in the early stages of the implementation process," KFMU Senior Policy Analyst Samantha Artiga tells ICDC. "Enrollment in the program is still continuing to ramp up month to month." The HIP program is available to low-income parents of children now covered by Medicaid and the State Children's Health Insurance Program (SCHIP), as well as childless adults. To be eligible for coverage, an enrollee's income must not exceed 200% of the federal poverty level, or $20,420 for an individual ($41,300 for a family of four). HIP combines a choice of health plans — one from the Anthem Blue Cross Blue Shield unit of WellPoint, Inc. and the other from MDwise — with an HSA. Participants are required to contribute a small portion of their annual income, a sliding scale up to 5%, into the account. The state contributes the remainder to bring the total up to $1,100 annually. Participants receive free preventive care, and the HIP covers 100% of medical costs once the account funds are depleted. On July 1, FSSA announced an expansion of HIP, allowing individuals and families with incomes that exceed limits for the subsidized program a buy-in option to obtain coverage. As with the subsidized HIP program, those accepted for the buy-in must be uninsured for at least six months and have no eligibility for employer-sponsored health benefits. About 140,000 Hoosiers are eligible for the HIP expansion, according to state officials. FSSA spokesperson Elizabeth Surgener says that people who opt for the buy-in have the same plan design and benefits as under the subsidized HIP program. While Anthem is participating in the buy-in option, MDWise and the AmeriChoice unit of United Health Group are expected to offer their versions of the program later this year, she adds. Premiums for the buy-in vary depending on a person's age and gender, according to Surgener. Monthly premiums for a 25-year-old male are around $125, while a 60-year-old female would pay about $550 a month, she tells ICDC. Of the nearly 13,000 adults enrolled in the HIP program as of June, 69% of enrollees were poor (with incomes less than $17,600 per year for a family of three), and nearly a third were age 50 or older. Almost two-thirds of enrollees were women, and roughly six in 10 were adults without dependent children. HIP Is Modeled After High-Deductible Plan Although HIP is modeled after a high-deductible health plan (HDHP) and an HSA, Artiga says that there are important distinctions from a private-sector health plan. While CDH encourages consumers to shop around for the best value in medical care, accounts under the HIP plan can be used only to pay for goods and services authorized by the plan's in-network providers. As a result, enrollees in the HIP program have less control over their account funds than they would over a traditional HSA, and more limited choices in how the funds may be used. "I would be wary of people assuming that the HIP program is exactly as what people consider a high-deductible plan and HSA in the private market," Artiga says. The HIP program "has a lot of elements that are meant to increase people's understanding of their health care costs and to incentivize them to obtain preventive care, but there are important differences in how the program is structured compared to a traditional high-deductible health plan." Artiga says that KFMU will continue to assess the HIP program as it grows and evolves, to see whether it measures up to expectations. "There are
a number of issues that are worth considering about the plan in terms
of how affordable it ends up being for different individuals, how well
the benefit package meets their needs, and the ultimate impact on outcomes,"
she says.
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