Dr. Rob Stone on Indiana's substitute Medicaid expansion

By Alycin Bektesh
WFHB 91.3 Radio (Bloomington, Ind.), Jan. 28, 2015

PNHP note: The following text is an unofficial transcript of excerpts from a radio interview given by Dr. Rob Stone, director of Hoosiers for a Commonsense Health Plan, on Indiana Gov. Mike Pence's recently announced Medicaid expansion alternative. The interview was conducted by WFHB's news director, Alycin Bektesh. To listen to the full 7-minute segment, click here. It was originally posted under the headline "H.I.P. 2.0 Accepted as Medicaid Substitute for Indiana." In Indiana’s newly approved program, enrollees will be required to pay premiums of 2 percent of their incomes for coverage. People earning less than  poverty are not required to pay premiums, but if they don’t, they will be required to pay co-pays for care, such as $4 for a doctor’s visit and $75 for hospitalization, and will lose their dental and vision benefits. Additionally, people above the poverty line will lose their coverage entirely for 6 months if they miss a payment -- a penalty never before applied to Medicaid patients -- unless they are deemed “medically frail.” Even small premiums and co-pays have been found to discourage care, and the cost to administer the program's changes will be more than it raises in premiums. Immediately following this transcript is an article about the settlement in the Herald Times of Bloomington on Jan. 30.

Alycin Bektesh: In his announcement yesterday, [Gov.] Pence called the updated Healthy Indiana plan a model for Medicaid reform across the nation. Dr. Rob Stone, director of Hoosiers for a Commonsense Health Plan, agreed that other states might try to emulate Indiana’s model, but said that in the end it would not be a victory for those seeking coverage.

Dr. Rob Stone: In all these other states they don’t have to deal with these premiums and lockouts and all this stuff. Everybody else has taken a much easier path, and we in Indiana have chosen to take this much more bureaucratic path, more complicated path, all in the name of somehow, supposedly, when people make these small payments then they’re supposedly better health care consumers. There’s really no evidence to prove that, and I think it’s just unnecessarily bureaucratic, which I think is a little bit of an irony since the Republicans are always the ones who are saying, you know, that government bureaucracy needs to be cut and avoided, but they’ve set up this really bureaucratic system.

Apparently Indiana is the only state that has that, and now I’m sure other states will ask for that, because there are a number of other states that are basically politically controlled by the Republicans who, up to now, haven’t completed their application for waivers. Many, of course, are not doing it at all. But there are a number of others that are looking for waivers and they may follow this path. That seems to have been the final point where HHS [the U.S. Department of Health and Human Services] gave up something, set a precedent. You know, maybe, I wish they hadn’t done that.

Alycin Bektesh: Pence is using the term “reform” to refer to HIP 2.0 coverage, but he’s not acknowledging the funds he turned away over the last two years that would help with low-income health insurance coverage, or that HIP 2.0 is essentially a higher-burden version of Medicaid.

Dr. Rob Stone: I still regret that we went 13 months without Medicaid expansion which we could have had a year ago January. It could already be in place. Hundreds of lives would have been saved, thousands of people would be getting treatment now for illnesses that were untreated. We’d be in a better place if we hadn’t gotten all this messing around, political posturing, over the last year or more.

Alycin Bektesh: Stone said consumer-driven health care is more of a showmanship term than a signal that something new has been created.

Dr. Rob Stone: So “consumer-driven” means that patients are supposed to be motivated to be good consumers, to make wise choices about whether they go to the emergency room or whether they get preventative care. And it all kind of sounds good when you listen to their rhetoric, but there’s actually no evidence – zero published, credible evidence – that these kinds of “consumer-driven” features really accomplish any of the things they claim to do. But they are politically important to the governor because he’s on record against the government, he’s on record as being vehemently opposed to the Affordable Care Act. But of course he’s also a smart enough guy to know that $1.7 billion a year of federal money coming into the state is only going to help the state. So he’s made a decision to move forward on this thing, and he wants to couch this thing as some kind of radical, new Medicaid change. There are a few changes to traditional Medicaid which I think are actually changes for the worse – like I said before, too much bureaucracy – but he’s got to kind of couch it politically and I think that really it’s not that big a change and I think it’s going to on balance help people. But in the larger picture I do worry that I don’t want to see Medicaid to continue to be privatized, bureaucratized, and made worse. It’s already a difficult enough program.


Feds forced changes in Pence's HIP 2.0 plan

By Lauren Slavin
Herald Times (Bloomington, Ind.), Jan. 30, 2015

In a rare moment of agreement, the state government and health care advocates have both praised the federal approval of a waiver to extend state Medicaid through the Healthy Indiana Plan, now called HIP 2.0.

But after reviewing the plan, those who worked to push the process to bring health care to low-income Hoosiers have two lingering questions: What took so long, and why?

"On many different levels, I think this is a wonderful thing. It doesn't change the fact we could've had this all 13 months ago," said Rob Stone, director of Hoosiers for a Commonsense Health Plan. "I remain skeptical that this plan is any improvement on traditional Medicaid."

HIP 2.0, which opened for enrollment Tuesday, is estimated to offer health care coverage to 350,000 currently uninsured citizens starting Feb. 1.

For months, Gov. Mike Pence's administration and the U.S. Centers for Medicare and Medicaid Services negotiated a Medicaid expansion to be paid for by the federal government until 2017, when that funding will decrease to 90 percent of costs. The state estimates it will pay $1.5 billion from 2015 to 2020 without imposing new taxes. HIP 2.0 will be paid for through new hospital assessment fees and Indiana's cigarette tax.

In order to receive government approval and funding, the state had to make adjustments to HIP 2.0, as well as discontinue several aspects of the original Healthy Indiana Plan. HIP 2.0 includes the same essential health benefits guaranteed under the Affordable Care Act, such as preventive care and hospitalization.

Unlike HIP, HIP 2.0 does not have capped enrollment. Any proposal with capped enrollment would not have been approved by the Centers for Medicare and Medicaid Services, nor receive matching federal funds, according to the U.S. Department of Health and Human Services.

Stone participated in a conference call with representatives from the Centers for Medicare and Medicaid Services on Tuesday after Pence announced that the HIP 2.0 waiver had been approved by the federal government.

"It sounds like really most of the compromises, most of the changes between the original HIP and HIP 2.0, happened during the negotiations in March, April, May of last year," Stone said. "It took a little while to kind of work out this thing about the six-month lockout, which has been a 12-month lockout in the original HIP."

The HIP "lockout" required all enrollees to pay premiums through their Personal Wellness and Responsibility, or POWER, accounts, which the state compares to a health savings account, or HSA. Those who did not pay into their POWER accounts became ineligible for health care.

Now, HIP 2.0 enrollees who are below the federal poverty level and cannot make payments into their POWER accounts cannot be locked out of coverage. The state also contributes $2,500 to POWER accounts, and a portion of any remaining account funds rolls over every year.

"(They) want to make sure those under 100 percent of the federal poverty level are a category of especially protected people under federal Medicaid," said Kosali Simon, a professor in Indiana University's School of Public and Environmental Affairs, and an affiliated scholar at the Urban Institute, which examines social and economic policy through research. "That way it looks like Indiana Medicaid has a plan for them, regardless if they pay any monthly fee."

Those who are above 100 percent of the federal poverty level and do not pay into their POWER accounts can only be locked out of coverage for six months, with several exceptions, including those who are medically frail.

"That lockout threat gives the incentive for people to keep paying in and stay in," Simon said.

HIP 2.0 enrollees who do not make payments into their POWER accounts because their incomes are below the federal poverty level are automatically enrolled in the HIP Basic plan after a 60-day grace period. Unlike HIP Plus, HIP Basic does not include vision or dental services, and requires copays for doctor's visits and hospitalizations. The HIP 2.0 website warns that this plan can be more expensive than HIP Plus.

"I still think it's silly to lock those people out," Stone said. "I hate to see dental be lost by those people, because they need dental more than anybody. But at least they'll have full coverage if they can't make these small payments."

Stone and Simon also wonder if the POWER payment will be worth the government hassle. While Pence has said using POWER accounts and having "skin in the game" has contributed to the high percentage of HIP enrollees satisfied with their health care, Stone says there is no peer-reviewed data to back that claim.

"Think about the administrative burden of thinking out how to write a check, get a stamp, make a credit card payment with a processing fee for $3 a month," Simon said. "How many letters will it take to remind people, to keep track of the 60-day grace period? All of that is a lot of work."

Indiana's HIP 2.0 proposal to CMS also included a mandatory work requirement called Gateway to Work, which was not approved. This program would have made referral to workforce training programs a requirement in order to receive health care unless enrollees were also in college or technical school.

Gateway to Work is now a voluntary referral work assistance program.

"I think job programs are always great, and they always sound better than they turn out to be in reality," Stone said. "I just don't want to put more bureaucratic requirements and impingements on access to health care. Republicans always claim they want less government regulation, and this is a government-instituted plan that has lot more bureaucracy and regulations and overhead cost."

How to apply:  Hoosiers can apply for HIP 2.0 online at, by mail, fax or calling 1-877-GET-HIP-9, or by visiting a local Family and Social Services Administration Division of Family Resources office. The Monroe County FSSA office is at 1711 N. College Ave., Suite 101, in Bloomington.