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Indiana gets OK to expand Medicaid—22 states still on sidelines

The Hoosier State soon will be seeing higher Medicaid enrollment.

Indiana on Tuesday became the 28th state to get approval for expanding its Medicaid program, as a key Obamacare component continued making inroads among Republican governors.

Up to 350,000 Indiana residents will be eligible for the program that covers poor people, starting Feb. 1, according to a report in the Indianapolis Star.

But those newly eligible people, who earn less than 138 percent of the federal poverty line, will be required to pay at least a fraction of the costs of the coverage. In 2015, that income level will amount to $16,242 annually.

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The Star reported that those people will have to pay contributions of between $3 to $25 every month toward the cost of their health coverage. If such an enrollee makes less than 100 percent of the FPL, or $11,770 annually, and doesn't pay that contribution, they will be shifted to a basic health plan that will require they make co-payments for medical services, the Star noted.

To impose such cost-sharing on Medicaid recipients required Indiana Gov. Mike Pence to get a waiver from the Obama administration, which he did after nearly two years of negotiations. The administration noted that it did not approve a work requirement for enrollees.

Marilyn Tavenner, the administrator for the federal Centers for Medicare and Medicaid Services, in a press release said that CMS and its parent, the U.S. Department of Health and Human Services, "are committed to working with states to design programs uniquely their own, while maintaining essential health benefits guaranteed under the Affordable Care Act and other key consumer protections consistent with the law."

Indiana Gov. Mike Pence
Source: Mike Pence
Indiana Gov. Mike Pence

Expanding Medicaid eligibility to nearly all adults who earn less than 138 percent of the poverty line is a major feature of the ACA.

It was designed to provide health coverage to low-income people who otherwise weren't eligible for benefits under their states' existing Medicaid programs, some of whom also earned too little to qualify for financial assistance available to people who buy private insurance on government-run Obamacare exchanges. That assistance, or tax credits, is available to people earning between 100 and 400 percent of the FPL.

To support Medicaid expansion, the federal government committed to funding coverage for the newly eligible at a rate of 100 percent for the first three years, through 2016, and then to maintaining federal funding at no less than 90 percent in perpetuity after a ramping down to that level. Individual states, who normally cover a higher percentage of Medicaid costs for previously eligible people, thus would have to pay no more than 10 percent of the costs for the newly eligible in future years.

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But the 2012 Supreme Court decision that upheld Obamacare's tax on people who failed to get health coverage as of 2014 also knocked down the ACA's mandate that every state expand their Medicaid program to cover nearly all poor adults.

Most Democratic-led states and the District of Columbia have embraced Medicaid expansion, which has played a large role in a significant reduction of the number of uninsured Americans in the past year.

And despite continued Republican resistance to Obamacare overall, a number of GOP governors have moved to expand their Medicaid programs, including Pennsylvania's Tom Corbett, who agreed to Medicaid expansion beginning this year, right before losing his re-election bid in November.

Those governors have been motivated by pressure from hospitals and other medical providers, who are interested in tapping the money available to cover the newly eligible, as well as arguments that it is unfair to leave their poorest residents without health benefits even as millions of people earning higher incomes qualify for Obamacare subsidies for private insurance.

Republican-led states currently considering expansion include Alaska, Tennessee, Wyoming and Utah. Two states led by Democratic governors, Montana and Virginia, also are actively discussing expanding their Medicaid programs.

Expansion opponents have said the existing Medicaid program is badly flawed and needs reform before additional beneficiaries are added. Opponents also object to providing public health coverage to adults who are able to work.

HHS Secretary Sylvia Burwell, in a press release, said, "I continue to be encouraged by interest from governors from all across the country who want to bring health care coverage to low-income people in their states by expanding Medicaid. They understand both the economic benefits of Medicaid expansion and the health and financial security it brings to their residents."

"The Administration will continue to work with governors interested in expanding Medicaid to devise approaches that work for their states while keeping faith with the law's goals and consumer protections," Burwell said.

Read the Indianapolis Star story here.