Healthy Indiana Plan

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Healthy Indiana Plan
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Our Bad Value

• Payin for a Caddy, Gettin a Chevy
• High Total Expenditure
• US spends 15.2 GDP on Healthcare
• The US spends the most in the world, and this
  percentage of spending is only increasing.
• Headlines US Healthcare spending to double by
  2017
• Poor Health Outcomes
• The US ranks 20th and 19th respectively for male
  and female life expectancy.
• Despite the investment made into the health
  system, the outcomes are some of the worst among
  major industrialized nations.
• How have we evolved to this point?

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We Cant Handle the Truth

• We have universal healthcare!
• We just wont admit it
• Use hospitals to mediate our two colliding
  American values
• Rugged Individualism
• American society is based on equal opportunity,
  and with that, personal responsibility to reap
  ones own rewards or consequences based on
  actions.
• Judeo-Christian Ethic
• Its not in societys interest to allow the poor,
  ill, disabled, and elderly to die in the streets.
  
• Conflict not in Consort

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Financing the Care of the Uninsured
Higher Health Care Premiums Family
950/year Individual 375/year
Tax Effect of Employer Sponsored Health
Insurance Undetermined

Government payments to hospitals (DSH, UPL, HCI)
426M
Out-of-Pocket Expenses paid by the Uninsured
503M
Charity Care Community Outreach Unknown
often Not Recorded
Federally Qualified Rural Health Centers 40M
Total Cost Over 2 billion
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Health Care System the Free Market

• Americans use markets
• Markets are the worst possible way to provide
  healthcareEXCEPT for the rest
• Consumers (Patients), Producers (Physicians) and
  the Third Party (Uninsured)
• Imbalance in Consumer/ Producer Relationship
• Cost-shifting to the insured requires opaque
  pricing
• Institutional entitlements
• Government Subsidies
• Disproportionate Share Hospitals, Health Centers
  etc.
• Inaction is not a market solution.

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Market Forces Only Work

• V

• P
• Q

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Indianas Healthcare Value and Vision
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Indianas Healthcare Challenges

• Since 1990, the uninsured population in Indiana
  has increased by 30
• 67 of Indianas uninsured are below 200 FPL
• Indianas Medicaid coverage level for
  non-disabled adults ranks 47th in the nation (22
  FPL)
• No awareness of cost or incentive to consider
  costs
• No incentive for health lifestyles

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Filling the Coverage Gap

MEDWorks Buy-in
250
FPL
200
The Gap in Coverage shown in Orange
SCHIP 2
Medicare
150
SCHIP 1
THE GAP IN COVERAGE Ages 19 - 64
Pregnancy Services Only
MEDWorks
133
Medicare/ Medicaid Dual Eligible
100
Standard Medicaid
Current Medicaid population shown in blue.
70 - 80
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Age 1-5
6-18
Pregnant
19 - 64
Disabled Blind
65
Aged, Disabled and Blind income eligibility is
driven by SSI standards rather than FPL
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HIP Target Group

• Non-Disabled Adults Ages 19-64
• Caretaker Relatives of dependent children with
  family incomes from 22 to 200 FPL
• Childless adults with family incomes under 200
  FPL
• Enrollment Cap 34,000 childless adults each year
• An estimated 375,000 Hoosiers are chronically
  uninsured under 200 FPL
• HIP has funding to cover approximately 130,000
  Hoosiers a year

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Fiscal Responsibility

• Program needed budget neutrality
• Funded primarily by increase in cigarette tax
• Anti-entitlement provision in legislation
  prevents an open ended obligation
• Skin in the game for participant
• Participant must contribute financially
• Sliding scaled contribution
• Health Savings Account structure

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Health Savings Accounts High Deductible Health
Plans

• Benefits
• Encourage healthy lifestyles
• Engages consumer to make cost and value based
  health care decisions (Invisible Hand)
• Promotes price transparency
• Promotes competition and quality
• Criticisms
• Deductible too high for low income population
• Discourage needed health care services
• Tax benefits are not applicable to low income

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Plan Structure
Individual POWER Account contribution will not
exceed 5 of gross annual income approximately
200 - 900 annually
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Encouraging Healthy Behaviors

• Creates financial incentives for preventive
  services through POWER Account roll-over
• If all age, gender, and pre-existing condition
  appropriate preventive service goals are met, all
  account funds (state and individual) roll over to
  offset the following years contribution
• If not, only the individuals prorated
  contribution to the account rolls over

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Personal Responsibility

• Terminations
• Proportional share of individuals contribution
  returned
• No State dollars paid out
• Disenrolled Due to Failure to Pay Contribution
• Receives 75 of their proportional contribution
• Emergency Room Co-payments

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Supporting a Private Market

• Anti-Crowd Out Provisions
• Participants must be uninsured for at least 6
  months
• Participants must not be eligible for
  employer-sponsored health insurance offered
  through their individual employer
• Contracting with Private Plans
• Anthem Blue Cross Blue Shield
• MDwise with AmeriChoice
• Buy-In Option

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Market Concept at Work

• Both Insurers are
• Providing free unlimited preventive care services
  rather than the minimum 500 required by the
  legislation
• Sending detailed monthly statements to members to
  monitor POWER Account balances, which are also
  accessible on the internet

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Cutting Deals

• Cigarette Tax- 44 compromise
• Providers paid at Medicare (not Medicaid) rates
• Mental health parity
• No vision or dental coverage

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Implementation Timeline

• November 2006- Governor Daniels announces plan
• April 2007- General Assembly passes HEA 1678
• May 2007- Submit RFP for Health Plans
• Five health plans submit proposals
• June 2007- Begin Regular Waiver Negotiations with
  CMS and OMB
• August 2007- Health Plans Selected
• Anthem Blue Cross Blue Shield
• MDwise and United Healthcare were asked to come
  together to offer HIP (Subcontracting
  relationship)
• Enhanced Services Plan- ICHIA

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Implementation Timeline

• September 2007- Conceptual Agreement with CMS
• November 2007- Contract signed with health plans
• December 14, 2007- Official Waiver Approval
• Funding for 130,000
• Limits on Childless Adults
• Eligibility Begins at Age 19 not 18
• No Dental or Vision Coverage
• No Plan Involvement in Enrollment
• Must Allow Legal Aliens to Participate
• Moved Contribution for 150-200 from 5 to 4.5
  for parents

Although, the waiver process made some small
changes, the basic structure for HIP including
benefit package and POWER Account remained
unchanged
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Implementation Timeline

• December 10, 2007- Statewide Media Campaign
  Begins
• Weve Got you Covered- TV, Radio, Billboard,
  Transit
• Direct Marketing to S-CHIP Parents
• December 17, 2007- Begin Accepting Applications
• On the internet at www.hip.in.gov
• Request by phone at 1-877-GET-HIP-9
• Pick up at local DFR office or Hoosier Healthwise
  Enrollment Center
• January 1, 2008- HIP Fully Implemented
• Nearly 7,000 applications received by start of
  program

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Enrollment

• 34,500 Applications Received by late March
• 25,500 Applications Processed
• Set up to process 4,000 applications per month,
  but volume much greater than anticipated!
• HIP Growth Strategy
• Doubled the original HIP staff to 91
• Turn marketing on and off as needed
• Monitoring Daily

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Lessons Learned

• Help those who need it, but increase personal
  responsibility and market incentives
• Rugged Individualism and Judeo Christian Ethic
  working in consort
• Fiscal responsibility
• Reach across the aisle, compromise cut deals
• Dont let perfection be an impediment to good

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The Bottom Line

• HIP will cover 130,000 Hoosiers who are currently
  uninsured
• Each State is different. Do what makes sense for
  Illinois!

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For More Information
Call1-877-GET-HIP-9
Or Visit www.hip.in.gov