By Antonio CorderoTheStatehouseFile.com

INDIANAPOLIS – Uninsured Hoosiers could be in line for medical coverage under a proposal to expand the Healthy Indiana Plan as an alternative to Medicaid Gov. Mike Pence announced Thursday.

The expanded program, named HIP 2.0, would offer Hoosiers three plans to choose from – HIP Link, HIP Plus and HIP Link. All of the plans include a Personal Wellness and Responsibility (POWER) account to serve as the equivalent of a Health Savings account to help pay for deductible expenses.

“I have been talking about using the Healthy Indiana Plan as the basis of an expansion of health care coverage in Indiana since before I even took office in January of last year,” Pence said. “Some of our neighboring states are expanding traditional Medicaid but since my tenure as governor we have said ‘no’ to setting up a federal health care exchange and will not expand Medicaid under my watch.”

Medicaid in Indiana currently covers people earning up to 22 percent of the federal poverty level. HIP 2.0 will be an option for Hoosiers ages 19 to 64 with incomes up to 138 percent of the federal poverty level. For 2014, that is approximately $16,105 annually for an individual and $32,913 for a family of four.

“Reforming traditional Medicaid is essential to creating better health outcomes and curbing the dramatic growth in Medicaid spending,” said Pence. “HIP 2.0 takes consumer-driven Medicaid reform to the next level by replacing traditional Medicaid for many in Indiana with a plan that empowers participants to take charge of their health and to be cost-conscious consumers.”

HIP Link would provide access to employer-sponsored insurance, giving financial support to members.

HIP Plus, an option for Hoosiers with incomes below 138 percent of the federal poverty level, provides enhanced benefits in exchange for POWER account contributions – ranging from $3 to $25 a month – and medical, dental, and vision coverage, as well as a comprehensive prescription plan.

HIP Basic, a default plan for Hoosiers below 100 percent of the federal poverty level, would offer a reduced benefit package, providing medical coverage only. HIP 2.0 would also add maternity benefits and remove annual and lifetime limits.

Pence said the expanded program’s six year cost of $18 billion would not come at a cost to taxpayers. The proposal calls for federal government funding of $16.5 billion with Indiana paying $1.6 billion. The state’s portion would come from the existing cigarette tax revenue, a Hospital Assessment Fee program, and federal Medicaid funding.

Calling Medicaid a “bureaucratic and fiscal monstrosity,” Pence said he believes HIP 2.0 would offer a better option for Hoosiers wanting medical insurance without expanding the Medicaid program through the Affordable Care Act.

“Medicaid is not a program we need to expand. It is a program we need to change,” he said. “In Indiana, we have learned that the way to change Medicaid is to base the program on what we know improves health and lowers costs, namely consumer-driven health care.”

The announcement of the program brought a mostly positive reaction from Indiana lawmakers, who agree Medicaid is not the right way to go.

“Indiana’s HIP 2.0 plan has the potential to expand health care coverage to hundreds of thousands of Hoosiers in a way that promotes personal responsibility and doesn’t require a tax increase,” Senate President Pro Tem David Long, R-Fort Wayne, said. “This can be a national, state-driven model that shows how to work with the private sector and our current health care system to affordably and effectively provide health care to the uninsured in our country.”

Senator Dan Coats, R-Indianapolis, said the plan is an “example of how the Hoosier state has been leading the way with innovative ideas and state-based solutions.” He said he would work with Pence and the Congressional delegation to ensure the proposal received “full and fair consideration” from the Obama administration.

Indiana House Democratic Leader, Scott Pelath, D-Michigan City, said if the plan can be agreed upon, “everyone should applaud.”

“From the start, Indiana House Democrats have demanded changes to a system that leaves nearly 400,000 Hoosiers with the emergency room as their only health care option,” he said. “We have asked the Governor to offer affordable health care to all uninsured Hoosiers. And we have always said if his way works, we will not dicker over the details. Hopefully, we are now entering the era of shared accountability.”

The next steps for the HIP 2.0 proposal include a 30-day public notice and comment period, as well as two public hearings. The plan would need the approval of the federal Centers for Medicare & Medicaid Services. The state plans to support its proposal by the end of June.

More information about HIP 2.0 is available at www.HIP.in.gov.

Antonio Cordero is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.