Republican Indiana Gov. Mike Pence said Tuesday that the state will expand Medicaid under the Affordable Care Act, making him the latest Republican governor to support the expansion of benefits under President Obama’s signature health-care reform law.
The expansion will cover 350,000 low-income residents of the state, Pence said, or about 46 percent of the state’s 765,600 uninsured residents.
Indiana joins 27 other states in expanding Medicaid, according the Kaiser Family Foundation.
Pence’s decision is part of a growing trend of GOP governors expanding Medicaid using a federally facilitated marketplace. This comes after years of opposition to the Affordable Care Act’s insurance exchanges.
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Pence made a point of saying that Indiana’s expansion of Medicaid was done in hopes that residents would eventually buy private health-care plans. Before implementation of the ACA, 14.8 percent of Indiana residents were uninsured.
“We have worked hard to ensure that low-income Hoosiers have access to a health care plan that empowers them to take charge of their health and prepares them to move to private insurance as they improve their lives,” Pence said in a statement.
Federal regulators at the Centers for Medicare & Medicaid Services (CMS) approved a waiver allowing Indiana to implement the plan. The request was granted after months of negotiations between Pence and the Obama administration. Indiana joins states such as Arkansas, Iowa, and Michigan, which have all received approval by the CMS for their alternative plans for Medicaid expansion.
Iowa and Michigan expanded their plans by including eligibility changes and requiring monthly contributions. Arkansas expanded Medicaid with a plan called the Private Option, in which low-income residents purchase health insurance through a private market.
The Arkansas plan is similar to a plan proposed by Republican Tennessee Gov. Bill Haslam.
The Healthy Indiana Plan 2.0 expands the state’s seven-year-old Healthy Indiana Plan, which covers 60,000 low-income residents with high-deductible health insurance and health savings accounts.
Residents with incomes of up to $16,297 annually for an individual, $21,967 for a couple or $33,307 for a family of four are generally eligible to participate in the plan.
Those enrolled in the plans will be required to make monthly contributions ranging from $1 to $20 or face losing benefits such as vision or dental care, according to reporting by the Wall Street Journal. Those enrolled in the plan will have co-pays of of up to $25 for repeat emergency room use.
The federal government will pay for 100 percent of the cost of the plan through 2016, and 90 percent of the cost in 2020 and beyond. The estimated $1.5 billion in costs to the state during that time will be paid for by the state’s cigarette tax and from a tax on hospitals.
Hospital officials and health and other advocacy organizations supported Pence’s plan to expand Medicaid. Hospitals were perhaps the most strident proponents, as they would stand to lose federal reimbursement payments through the ACA. Indiana state hospitals would have lost nearly $1 billion in 2016 without the expansion, according to the Urban Institute.
Enrollment for the expansion begins immediately and coverage for those who enroll begins on February 1.