Indiana's Medicaid program paves way for other states

Indiana's experimental Medicaid program, Healthy Indiana Plan, may pique the interests of Republican governors nationwide who remain on the fence about expanding the program.

Indiana's take on the Medicaid program requires eligible residents to contribute a small amount of health insurance premiums monthly--anywhere from $1 to $27--to a special health account. The concept is gaining popularity and may be an indicator of the program's future throughout the industry, reports the Los Angeles Times.

More than 297,000 individuals enrolled in Indiana's program as of July 1; about 72 percent of enrollees were making the required contributions to the state.

Arkansas and Iowa implemented similar cost-sharing requirements in their Medicaid programs, while GOP officials in Utah, Arizona and Ohio are toying with the idea.

The Obama administration, which must approve new cost-sharing requirements, says it's open to proposals from GOP governors. The Department of Health and Human Services' Secretary Sylvia Mathews Burwell told the L.A. Times that "we welcome the conversation" regarding Medicaid alternatives, noting that Indiana's plan "is a big deal and a very important deal."

In an effort to enable residents to make smarter health choices, states develop their Medicaid programs to resemble private insurance while also charging premiums, co-pays and penalties for emergency room visits, according to the article.

However, studies prove that creating health savings accounts for Medicaid enrollees is cost-prohibitive, and it is challenging to design behavior incentives to improve health outcomes for this consumer group, FierceHealthPayer previously reported. For instance, after Oregon's Medicaid program began charging residents $20 in monthly premiums and $5 in co-pays, the program's enrollment decreased by nearly half in 2003.

But, as the article points out, Indiana's trial run is still new--while data show that residents in an earlier version of the Healthy Indiana Plan received more preventive care than traditional Medicaid patients, research is lacking on the program's effects on chronic diseases.

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