Half a loaf with Indiana’s HIP 2.0

Health Affairs has a recent evaluation of Indiana’s HIP 2.0 Medicaid Expansion program **. It is a middling result. More people are covered in Indiana than in states where there is no Medicaid expansion and fewer people are covered compared to states where there is a full fledged, no strings attached Medicaid expansions:

We estimated the impact of this expansion on coverage rates and compared the effects to results from other states that expanded Medicaid after 2014. We found that Indiana’s coverage gains (relative to pre-ACA uninsurance rates) were smaller than gains in neighboring expansion states, but larger than those in other states. These results imply that while one potential reason for Indiana’s lower gains relative to neighboring states was its cost-sharing requirements, expansion led to unquestionable coverage gains in the state.

This has immediate policy relevance because this is the desired form of Medicaid that the CEnter for Medicare and Medicaid Services (CMS) is supporting. CMS will quickly approve waivers for increased cost sharing, lock-out periods and premiums. CMS will quickly approve waivers for work requirements.

The key question from Medicaid advocates is if the Indiana style Medicaid is what is on the table is it better compared to what?

This evaluation shows that HIP 2.0 is better than not expanding Medicaid. If a state has not expanded Medicaid already, than we have a strong revealed preference of at least one veto-position holding entity that straight Medicaid expansion via a state plan amendment is not going to easily happen unless the possession of veto control points is switched by electoral change. Therefore, the realistic choice is either continued no expansion or a convoluted kludge that is HIP 2.0, I’m on board with a convoluted kludge as it can be improved upon in the future. That is what is happening in Virginia. That is what may happen in Utah.

On the other hand, Medicaid expansions via state plan amendments are superior to “private market facsimiles” like HIP 2.0 on the metric of enrollment and usefulness. States that have already expanded without a waiver are going backwards. Those are the states where there should be a fight as it is hard to argue that a waiver would allow for any improvement in outcomes compared to the status quo as the current evidence base shows that the status quo of a state plan amendment is superior to a pseudo-HIP 2.0 waiver plan.

** doi: 10.1377/hlthaff.2017.1596 HEALTH AFFAIRS 37, NO. 6 (2018): 936–943