Last January, Indiana Governor Mike Pence reached a deal with the Obama administration to expand Medicaid under Obamacare. After nearly a year of operation, the data is in, and the early outcomes of the program’s rollout are finally setting in. The results so far have been little personal responsibility for enrollees and higher costs for taxpayers. Other states considering a similar designed expansion should think twice.
Enrollees pay less so taxpayers can pay more
HIP 2.0 was initially touted as a plan that would embody the principles of “personal responsibility” and “self-reliance.” In practice, however, Indiana’s expansion to able-bodied adults requires even less cost sharing than traditional Medicaid, and very few enrollees have been disenrolled due to non-compliance.
Federal law allows states to charge Medicaid enrollees up to 5% of their income as premiums, copayments, co-insurance and other out-of-pocket costs. Under HIP 2.0, able-bodied adults have cost sharing capped at 2% of income for nominal monthly premiums to “POWER Accounts.” These accounts are supposed to resemble Health Savings Accounts (HSAs), but taxpayers have ended up funding more than 95% of the money in the accounts.
It should be noted that those below the poverty line can keep their Medicaid coverage even if they don’t contribute at all. As of July 2015, only 10% of HIP 2.0 enrollees were above the poverty line, meaning that 90% of enrollees weren’t obligated to make any required monthly contributions in order to receive taxpayer-funded Medicaid.