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Samuel Hoffman | The Journal Gazette
Gov. Mike Pence visits the Women of Bold Empowerment Luncheon in Fort Wayne on Thursday after unveiling his HIP 2.0 health insurance plan.

Healthy alternative: Pence’s HIP 2.0 largely meets Obamacare goals

Gov. Mike Pence calls his new coverage plan “Healthy Indiana Plan 2.0.” Not “Pencecare.” That would sound too much like “Obamacare,” which the governor, while discussing the new plan in Fort Wayne Wednesday, took pains to note he still opposes.

All the Indiana-does-it-better rhetoric aside, though, Pence’s new plan is aimed at the same problem Obamacare addresses: getting health care coverage to people who can’t afford it. And the plan relies heavily on federal funding, which means that Pence is, in a sense, partnering with the dreaded Affordable Care Act.

Politics aside, HIP 2.0 is a program that, though short of perfect, looks as if it could be a winner.

It is, first of all, encouraging that Pence is confronting a problem his critics have been talking about for the past year: That many Hoosiers – the governor puts their number at 350,000 – make too much money to qualify for traditional Medicaid and too little to qualify for the tax credits to pay for an Obamacare market plan. Like most Republican governors, Pence would not allow the expansion of Medicare to cover that population. Pence has contended that, in the long run, Medicaid expansion would cost Indiana taxpayers too much money. In Pence’s view, HIP’s requirement that enrollees pay a small monthly fee makes them more responsible as health consumers.

Now, with a nice assist from the Indiana Hospital Association, Pence has been able to put together an ambitious plan through which HIP would not only cover those in the coverage gap but also those Hoosiers now covered by Medicaid.

The hospital association, which has strongly backed expanded care, has agreed to increase the fees hospitals pay to the state to support the HIP 2.0 effort. If things go as they should, the hospitals’ costs will be more than recouped as their costs for serving the uninsured go down. The state will also throw in money from cigarette tax revenue.

As Pence noted, the result will mean “no new state spending and no state tax increases.”

All this, of course, depends on approval by the federal Centers for Medicare and Medicaid Services. The sticking point is that the HIP 2.0 plan would require enrollees to pay $3 to $25 a month, determined by income. That would be a first for existing Medicaid patients, and might be a hardship for the poorest of the poor. It also is not strictly allowed under the Medicaid expansion funding rules of Obamacare.

But other plans that the federal government has approved have consumer-driven elements not dissimilar to HIP 2.0. So there’s reason to believe Pence’s plan could become a reality by next year.

Without the ideological overlay, a solution could have come sooner and already have been in place to serve Hoosiers who now will have to wait till 2015 to get a plan. That lost time makes it only more urgent that federal officials stretch their rules to accommodate HIP 2.0.

Pence has finally found his voice on health care this spring, and his words are eloquent. “We must not forget,” he said in his announcement Thursday, “that we are talking about our neighbors, our friends.” We are talking, he said, “about respecting the dignity of every Hoosier.”

We are talking about closing the health care gap, and Pence’s plan looks as though it can do that.