The Governor’s Plan for a Healthier Indiana Seema Verma, MPH SeemaVerma Consulting

Health Savings Account Utilize key principles of HSAs: value and cost conscious consumerism Price transparency Address key criticisms of health savings accounts for low income persons: Deductibles unaffordable especially if contributions to premiums are required Barrier to seeking needed preventative services Low level of tax liability

New Program Consumers with “skin in the game” Financial incentives to be healthy and to use health care services appropriately Promote price transparency for providers

Current Medicaid Programs & Proposed Governor’s Plan Population FPL is recalibrated annually and dependent on household size. For a family of four, 100% of the FPL is $20,000. FPL 200% Proposed Population 350,000 Eligible (Childless Adults Between 100-200% FPL only) 185% Medicare 150% 133% Medicaid Population- One of the lowest coverage States in the nation 100% 70% - 80%* 23% 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

The Governor’s Plan Covered Services POWER Account INSURANCE COVERAGE Physician Services Prescriptions Diagnostic Exams Disease Management Home Health Services Outpatient Hospital Inpatient Hospital $500 Free Preventive Care Smoking Cessation Prostate Exam Diabetes Mammogram Physicals POWER Account $1,100 Individual* and State Contributions Controlled by Participant to Cover Deductible INSURANCE COVERAGE $300,000 Annual Coverage $1 Million Lifetime Coverage *Individual contribution not to exceed 5% of gross annual income

Personal Wellness Responsibility (POWER) Accounts How the POWER Account works: State and participant contribute a combined total of $1,100 per adult into account to cover deductible Individual contributes no more than 5% of family income, pro-rated to account for payments to other programs Employers may elect to contribute Payroll Deduction Not a traditional HSA, no tax advantage Unspent funds $500 stays in account for next year & lowers individual and State contributions Participants that no longer qualify get a pro-rated payout The participant may withdraw anything above $500, if preventative services are completed

POWER Account State pre-funds account & individual makes monthly contributions Individual controls account spending Debit Card Covers only approved plan benefits by plan providers

Funding for POWER Account Single Adult: $1,100 $120 $365 $610 $980 $735 $490

Funding for POWER Account Family of Four: $2,200 (Two Adults & Two Children) $800 $1,096 $1,200 $1,400 $1,104 $1,000 Contributions reduced to account for premiums paid to Medicaid for children

Administration 2-5 HMOs or Commercial Carriers Plan Responsibilities Benefit plans similar Medicare provider payment as floor Plan Responsibilities POWER Account contribution collections Marketing Enrollment Claims payment etc. Disease management programs or other incentive programs for chronically ill

High Risk Individuals Screening for high risk conditions at enrollment Referred to high-risk pool for disease management Cost sharing remains consistent State pays higher premium and may fund a larger POWER Account Those that exceed $300,000 will likely be eligible for existing Medicaid program

Funding for The Governor’s Plan Public Health $35M Smoking Reduction $24M Immunizations $11M + 25¢ = $130M + 50¢ = $207M DSH* $50 M DSH* $50M Increased Cost of Cigarettes $95M Increased Cost of Cigarettes $172M Participant Contribution $132M Participant Contribution $80M CNOM** $130M Matched Federal Funding $175M Matched Federal Funding $316M CNOM** $80M $480M to cover 120,000 $800M to cover 200,000 *DSH: Disproportionate Share Hospital Program - Currently funded at $200M **CNOM: Federal matching “credit” for State’s current health programs

TRANSPARENCY IN PRICING AND SUBSIDIZATION STATE BUDGET STABILITY VALUES & VISION TRANSPARENCY IN PRICING AND SUBSIDIZATION Moves existing government subsidies away from providers to individuals to purchase health insurance Reduces cost-shifting from uninsured to insured populations Increases quality as providers compete to serve low income Encourages subsidized population to make value conscious decisions in the health care market place. OWNERSHIP SOCIETY Cost sharing required at all service levels All participants must contribute Access to HSA-like Accounts VALUES Promoting healthier Hoosiers Promoting personal responsibility Using private market solutions Using overt, not covert, subsidies Practicing fiscal responsibility Helping Hoosier business Work Incentives DISEASE PREVENTION & HEALTH PROMOTION First dollar coverage for preventive care Rewards for positive health behaviors Disease management for high cost populations LONG TERM STATE BUDGET STABILITY Not an entitlement program Enrollment capped Commercial benefit package Funding sources keep pace with cost growth INCREASE ACCESS TO COMMERCIAL PRODUCTS Subsidies for low-income Hoosiers to receive commercial health plans and to have an“ HSA-like account. Require subsidy eligible persons to maintain current coverage ECONOMIC DEVELOPMENT Reduces cost growth trajectory of premiums by limiting cost-shifting to insured populations Brings new dollars to the State and healthcare industry

Contact Information Seema Verma, MPH sverma@seemavermaconsulting.com (317) 809-8536