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Category: All > State IssuesIndiana’s free-market idea to help the uninsured get health coverageDecember 31, 2008
by Grace-Marie TurnerIndiana Gov. Mitch Daniels has used free-market thinking and a healthy dose of individual responsibility to create an innovative program to help uninsured people get health insurance. The Healthy Indiana Plan (HIP) passed the legislature with bi-partisan support last year, and people already are enrolling in the new program. It has funding to cover 130,000 people, and tens of thousands of people already are enrolled. It works on the principle of a Health Savings Account: Participants get a POWER account (for Personal Wellness Responsibility) to use for routine health spending, and they are covered by health insurance for larger medical bills. The state of Indiana and HIP participants jointly pay into the POWER account so that people have $1,100 a year to spend on their routine care, such as doctor’s visits or prescription drugs. After that, regular insurance triggers in, just like with a Health Savings Account. In addition to paying for all medical bills above $1,100, the insurance also covers up to $500 a year in preventive care, such as cancer screenings. People are eligible for HIP: 1) if they have been uninsured for more than six months, 2) if they don’t have access to job-based health insurance, and 3) if they earn less than 200% of poverty -- about $41,300 a year for a family of four. The amount that people pay into their POWER account depends upon their income, but no one will pay more than 5% of their income. For example, a family of four with an income of $20,000 would be eligible. The state deposits $480 into their account, and then the family pays $620 a year, or about $52 a month. For that, they get the $1,110 in their account to pay for small medical bills plus insurance that covers preventive care and all of their medical bills above $1,100. The plan encourages responsible health spending because people see that the money in the account rolls over if they spend wisely. And they have the security of knowing they have health insurance that will cover them and their families so big medical bills would not bankrupt them if someone gets sick or injured. Many states want to simply expand Medicaid to cover the uninsured. Instead, Gov. Daniels wanted to give people new incentives to spend money wisely, to get preventive care, and to become partners in managing their health costs. For example: Shelly Ross, a community college instructor and divorced mother of two, was one of the first people to sign up for the plan. She makes $25,000 a year and pays $91 a month for her coverage. She already has had a cataract excised and received the mammogram she had been putting off. “I’m smiling when I’m writing that check,” she told a columnist for The New York Sun. “It’s not like I wanted a free ride.” Gov. Daniels had to work hard to convince Washington to approve the plan because it is partly funded with Medicaid money, and the Office of Management and Budget saw this as a big change. Gov. Daniels also passed an increase in the cigarette tax to fund his state’s share of the program, for which he was severely criticized by the right. But he felt that Indiana’s high uninsured rate and declining job-based insurance required a creative solution and that HIP was worth the price. The plan is popular in Indiana, and other states now are looking at whether this creative market-based solution to help the uninsured get coverage could work for them as well. Commentsanonymous at 01/15/2009 21:02:07The Indiana HIP program makes sense - if the uninsured and undersinsured have a stake in their health care spend, they will be more likely to conserve those dollars and spend wisely. There aren't enough workers contributing taxes to the current system to sustain it. Hopefully HIP will be a template for correction and accountability.Paula L Spart at 01/06/2009 22:27:23I really like Daniels' idea of raising the cigarette tax. It makes perfect sense to me considering how addictive and how dangerous to one's health and that of others smoking is. This may be a way of getting the money needed to pay for the medical care needed as a result of people smoking. Not only would I be in favor of this money being used to treat smoking conduced conditions such as COPD and lung cancer, but as a way to help people stop smoking. anonymous at 01/06/2009 09:12:32I am disabled and it is really hard to get the care you need. My medicines are too high and I had to stop taking some of them. I am only 48 and have been disabled since1998 and I am here to tell you that I don't see how in the world older people can take care of there needs, becasue of the high med's and insurance. It is such a shame that here in America, whom we help so many other countries, can't seem to take care of our own!! Someone needs to make a law that will take care of people that are disabled and on low income and the veteran's that have fought for our freedom!!! Man how do we need some help, not counting on those that just don't make enough to afford insurance for their families! Please won't someone do something right? For God sake, take care of our own for a change! Think about it, there are so many without insurance and cannot afford any, and if they do have it, they sure can't afford the medicines, which is a down right shame! Thank you! Add Comment |
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anonymous at 01/25/2009 09:20:47
For transparency purposes, I feel compelled to state that I am a Republican. I voted for Governor Daniels each time he ran for governor. I still remain a Daniels' supporter.
Unfortunately, as is usually the case with a government-sponsored program, particulary one relating to health care, all is NOT positive w/respect to HIP. In fact, there is much to be concerned with as it relates to HIP.
I am an Indiana citizen, and, though I am not personally covered by HIP, I know folks who are, and they face a very small amount of accessible doctors, which is forcing them to wait weeks, if not months, just for an office visit. From a personal standpoint, I cannot state that this is the rule across the board; nonetheless, I think it likely that while the doctors involved in this program are probably among the most compassionate and/or needy, this in no way supports that they are among the best available physicians (another topic altogether).
This year, Indiana's legislature is likely to adopt some form of smoking ban, and with a major portion of HIP funded through the state's tobacco tax receipts, it doesn't seem likely that there will be a projected revenue stream to adequately sustain HIP, much less expand its reach. This, coupled with this nation's financial woes, is likely to find the federal government cutting back on social welfare programs, which over the long-term doesn't bode well for those covered under HIP.
I credit Governor Daniels for his forward thinking; however, all is NOT as it appears. First, from a political standpoint, he had MUCH TO GAIN and NOTHING TO LOSE in rolling out HIP. On the surface it would seem that Gov. Daniels push for HIP was a result of his aim to reduce our uninsured ranks, yet HIP also has allowed Indiana to grab hold of a much larger share of federal Medicaid subsidies, which were projected to result in a considerable surplus for Indiana over HIP's first 10 years. Thus, a key driver behind the Daniels' administration push for HIP.
I suppose this is one of those situations where something...anything, even HIP...is better than nothing at all. Just the same, it is a far cry from the private sector, employer-sponsored model that most of us benefit from across America today. Any government-sponsored program, state and/or federal, will significantly impair our ability to secure adequate and timely health care services from superior physicians and medical facilities. As a result, there will be an unquantifiable measure of health care rationing.
If health care is socialized--in any form--on a national level, we will all pay the tab for what will ultimately become one of the largest power grabs ever initiated by the government, and we will all realize the breadth of government intrusion into our lives as a result when we find ourselves having to pay a number of new taxes going forward (e.g., look up New York's proposed new tax on soft drinks having less than 70% fruit juice, which is expected to generate more than $400 million/year).
Obama's initial direction to preserve our employer-sponsored health care model and simply add a government option is brilliant, but only from a political standpoint. Why? Because adding a low cost government option next to private sector programs will serve him well politically, as it will provide the healthy(ier) in America with an opportunity to secure health insurance through the government at far less cost.
What's wrong with this outcome? Well, first, other than for routine physicals, the healthy generally will not have a need to access the system, so they will create revenue margin for the government. Also, the migration of healthy lives into the government program will leave the private sector's employer-sponsored system having to underwrite an increasingly higher proportion of America's unhealthy population, which will result in ever-higher premium increases.
In the insurance world, this phenomenon is known as a "death spiral". If Obama's plan is ultimately rolled out, in a few short years the private sector program we arguably will need even more in future due to our aging population will implode, unable to financially sustain the massive increase in underwriting losses associated with a deteriorating risk pool.
The only remaining option for the American people thereafter: Any program the government decides is appropriate for all of us. In my humble opinion, this will be anything but positive. It will be a living nightmare for us and our loved ones, and likely will be even worse for our children and grandchildren. I pray that God will protect us all by keeping the government from further expanding its grip on health care.