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Indiana’s substitute plan awaits OK

Gov. Mike Pence and GOP lawmakers have rejected efforts to expand traditional Medicaid coverage in Indiana, instead seeking federal permission to use an existing state program that requires participants to contribute a percentage of their income.

Similar efforts with the federal government have failed in the past because of the cost-sharing component.

Supporters of the Medicaid expansion believe Indiana needs to take advantage of the billions of dollars the Affordable Care Act promises for covering up to 400,000 currently uninsured Hoosiers.

If not, these people would fall into a gap between the state’s current health insurance program for the poor and those who would be eligible for tax credits to buy health insurance on public exchanges.

Currently, Indiana Medicaid covers only Hoosiers who make up to $11 a day. Pence claims Medicaid is broken and would cost the state too much in the future.

An estimate from the state actuary estimates the cost of the expansion to the state from fiscal year 2014 through fiscal year 2020 at about $2 billion.

The bulk of those costs come in the later years because the federal government pays initial costs and then reduces its commitment.

But the Indiana Hospital Association estimates the cost to the state to be much lower – about $500 million during that time period.

And supporters point to millions the state spends on the Healthy Indiana Plan from the cigarette tax, including a trust fund of $300 million, as well as funding for a high-risk insurance pool that could be used for the new costs.