The Governor’s Plan for a Healthier Indiana

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

2. 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

3. 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

4. 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) Medicare 185% 150% 133% Medicaid Population- One of the lowest coverage States in the nation 100% 70% - 80%* 23% Age <1 1-5 Disabled Blind* 6-18 *65+ Pregnant 19 - 64 *Aged, Disabled and Blind income eligibility is driven by SSI standards rather than FPL

5. The Governor’s Plan • Covered Services • 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

6. 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

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

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

9. 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

10. Administration • 2-5 HMOs or Commercial Carriers • 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

11. 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

12. 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 $800M to cover 200,000 $480M to cover 120,000 *DSH: Disproportionate Share Hospital Program - Currently funded at $200M **CNOM: Federal matching “credit” for State’s current health programs

13. 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

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