The Healthy Indiana Plan House Enrolled Act 1678 A Pragmatic Approach Governor Mitch Daniels July 16, 2007
Indiana s Fiscal Health is Good First Back-to-Back Balanced Budget in Eight Years $1,000.0 Revenue - Expenditures (in millions) $500.0 $0.0 -$500.0 -$1,000.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -$1,500.0 Fiscal Year Source: Indiana Office of Management and Budget (OMB)
.But Hoosiers Physical Health is Not 5th Highest Rate of Smoking 3 rd Highest Rate of Cancer Deaths 10 th Highest Rate of Obesity 12 th Highest Rate of Heart Disease Source: Indiana State Dept. of Health (ISDH)
Indiana s Immunization Challenge 22% of Hoosier children don t receive recommended immunizations by age 2 Indiana ranks 39th nationally in immunization for 2-year-olds
Smoking in Indiana 10,200 kids under 18 start smoking each year 9,800 adults die each year from smoking; 160,000 kids likely to die prematurely from smoking More than $1 billion per year is spent in Indiana on healthcare directly related to smoking Indiana Medicaid spends more than $400 million on smoking-related healthcare costs Source: Indiana Tobacco Prevention and Cessation (ITPC); Indiana University Center for Urban Policy and Environment
November 2006 State Cigarette Excise Tax Rates and Rankings $3.00 State Cigarette Taxes Michigan $2.00 $2.75 $2.50 Pennsylvania $1.35 Ohio $1.25 Minnesota $1.23 $2.25 $2.00 $1.75 Illinois $0.98 Wisconsin $0.77 $1.50 Indiana $0.56 New Jersey Rhode Island Washington Arizona Maine Michigan Alaska Vermont Montana Hawaii South Dakota Connecticut Massachusetts New York Texas Pennsylvania Ohio Minnesota Oregon Oklahoma DC Maryland Illinois New Mexico California Colorado Nevada New Hampshire Kansas Wisconsin Utah Nebraska Wyoming Arkansas Idaho Indiana Delaware West Virginia North Dakota Alabama Georgia Iowa Louisiana North Carolina $1.25 $1.00 $0.75 $0.50 Florida Kentucky Virginia Tennessee Mississippi Missouri South Carolina $0.25 $0.00 Source: ITPC Cigarette Tax
Increasing the Cost of Cigarettes Will Reduce Youth Smoking Number of Youth Smokers 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 86,000 63,000 39,000 15,000 Change in Youth Smokers 0 0 $0.25 $0.50 $0.75 Cost Increase Source: ITPC
Uninsured in Indiana: A Growing Problem Percent of Population 16 14 12 10 8 6 4 2 0 13.5 14.0 14.3 12.5 11.5 2000-01 2001-02 2002-03 2003-04 2004-05 Source: U.S. Census Bureau
The Perfect Storm Indiana Medicaid - 4 th lowest coverage level (22% FPL) for non-disabled adults National Average for Medicaid coverage rate is 89% FPL From 1999 2004, Indiana had the second highest drop in employer-sponsored health insurance. Since 1990, the uninsured population has increased by 30%
State Specific Bipartisan Solution The Healthy Indiana Plan- HEA 1678 The stars were aligned in order for us to do this We have all come together to say that if we want to improve the quality of health care for the citizens of Indiana, then we need to take this bold step. Representative Charlie Brown Democratic House Sponsor of HEA 1678
The HIP Plan Not an Entitlement No Mandates Market Based Approach Empowers Low-income People With Health Savings Type Account for Low-Income Persons Lays the Foundation for Price & Quality Transparency Promotes Personal Responsibility & Consumerism in the Medicaid Population Focuses on Prevention & Promotes Health
The Healthy Indiana Plan $500 Free Preventive Care Smoking Cessation Prostate Exam Mammogram Diabetes Physicals POWER Account Covered Services Physician Services Prescriptions Diagnostic Exams Disease Management Home Health Services Outpatient Hospital Inpatient Hospital $1,100 Individual* and State Contributions Controlled by Participant to cover initial medical expenses INSURANCE COVERAGE $300,000 Annual Coverage $1 Million Lifetime Coverage *Individual contribution not to exceed 4.5% of gross annual income
Personal Wellness Responsibility (POWER) Accounts How It Works: State and participant contribute a combined total of $1,100 per adult into account for initial medical expenses Individual controls spending from account Individual Required to Make Monthly Contribution Must make contribution within 60 days, or terminated from program & can t re-enter for 12 months Remaining Balance If preventive services are met, all funds roll over If not met, State s portion reverts to State, only a prorated portion of the individual s contribution rolls over Payout of pro-rated individuals contribution for those that leave the program
Funding for POWER Account Annual Contribution $1,200 $1,000 $800 $600 $400 $200 $0 State Participant Single Adult: $1,100 $181 $487 $717 $896 $919 $613 $383 $204 $10,210 $12,763 $15,315 $20,420 Annual Income * Participant contribution on a sliding scale from 2-4.5% of annual income
Funding for POWER Account $2,500 Family of Four: $2,200 (Two Adults & Two Children) Annual Contribution $2,000 $1,500 $1,000 $500 State $0 Participant $1,787 $413 $1,426 $774 $1,351 $20,650 $25,813 $30,975 $41,300 Annual Income $849 *Contributions reduced to account for SCHIP premiums $941 $1,259 ** Participant contribution on a sliding scale from 2-4.5% of annual income
FPL is recalibrated annually and dependent on household size. In 2006 for a family of four, 100% of the FPL is $20,000. FPL 300% 200% 185% 150% 133% 100% 70% - 80%* 23% SCHIP 2 SCHIP 1 Standard Medicaid Age <1 1-5 6-18 Pregnant 19-64 *65+ Disabled Blind* *Aged, Disabled and Blind income eligibility is driven by SSI standards rather than FPL Healthy Indiana Plan Targeted Population SCHIP 3 Pregnancy Services Only HIP Population Approximately 546,000 Eligible Medicare MEDWorks Buy-in MEDWorks Expanded Coverage from HEA 1678 shown in pattern Current Medicaid population shown in solid.
Next Steps: Federal Level HIP Provides a Historical Opportunity to Reshape the Nation s Medicaid Program 1115 Waiver Pending Approval from OMB & CMS Give Indiana credit for running a modest program, raising new revenue ($150/million) and for implementing system efficiencies immediately upon taking office Need adequate funding to assure program is robust and to achieve goals Need timely decision
Next Steps: State Level RFP released 5 days after legislation passed 5 Proposals Received from Private Insurers Continue negotiations with CMS & OMB Enrollment by November 2007 Go live in January 2008
Other Initiatives Aimed At Low-Income Hoosiers Expands SCHIP to 300% FPL (but only up to the current SCHIP allotment) Presumptive Eligibility for Pregnant Women. Expands Coverage for Pregnant Women: from 150% FPL to 200% FPL
Improving Access to Health Insurance for All Hoosiers Employer s Section 125 Plan: Provides a credit to employers for the cost of implementing a Section 125 plan of $50 for each employee up to $2,500 Expands Dependent Coverage: Children can stay on their parents health insurance plans until age 24 Small Business Qualified Wellness Program Tax Credit Tax credit for certified wellness programs Only for employers < 100 employees
44cent Voluntary Cigarette User Fee 5 Health Initiatives & ITPC 3 Provider Reimbursement 3 Section 125 Plans 33 Healthy Indiana Plan & $11 M for Immunizations for Kids
The HIP Plan Protection: Protect Hoosier children from smoking and disease Prevention: Encourage Hoosiers to seek preventive care Peace of mind: Offer health coverage to thousands of uninsured Hoosiers & Personal responsibility: Give individuals control of their health care decisions