Indiana Will Allow Entry to Medicaid for a Price

WASHINGTON — After a lengthy back-and-forth, the Obama administration has agreed to let Gov. Mike Pence of Indiana, a Republican, expand Medicaid on his own terms, including some that have not been allowed before under federal rules.

The plan will extend coverage to an additional 350,000 Indiana residents with incomes of up to 138 percent of the federal poverty level — about $16,100 for a single person and $27,310 for a family of three — starting next month. As in the 27 other states that have expanded Medicaid under the Affordable Care Act, the federal government will cover the entire cost through this year and at least 90 percent in future years.

But Mr. Pence, like several Republican governors before him, insisted on adding a conservative twist to the expansion, mostly by requiring beneficiaries to pay something toward their coverage. Under his plan, most people will have to pay monthly premiums equaling 2 percent of their household income — between about $3 and $25 a month for a single childless adult — for coverage that includes dental and vision benefits.

At the Obama administration’s insistence, people who earn less than the poverty level will not have to pay premiums. But if they do not, their coverage will be downgraded to exclude dental and vision benefits. And they will owe co-payments for medical care, including $4 for a doctor’s visit and $75 for a hospitalization.

“There are a lot of first-in-the-nation aspects to this,” Mr. Pence said in an interview. “It gives Hoosiers the dignity to pay for their own health insurance, and that transaction is important to starting people on a path toward really embracing greater ownership of their health care.”

In another unusual concession, the Obama administration will let Indiana lock some people out of coverage for six months if they stop paying monthly premiums. This provision will not apply to people earning less than the poverty level or to those deemed “medically frail.” Still, it is a first for Medicaid coverage, which has not permitted lockout periods until now.

Advocates for the poor said they feared the concessions granted to Indiana would prompt other states to seek similar requirements for Medicaid enrollees.

Robert Restuccia, the executive director of Community Catalyst, a health care advocacy group based in Boston, said the Obama administration should “wait for conclusive evidence of the impact of these policies in Indiana before deciding whether or not to approve them in other states.”

Joan Alker, executive director of the Georgetown University Center for Children and Families, called the Indiana plan “enormously complicated” and questioned the fairness of withholding dental and vision coverage from those who cannot come up with premium payments.

“It’s terrific that Indiana is moving forward and extending coverage,” she said, “but the structure of this agreement means that many eligible poor adults won’t be able to access all the services they need.”

Still, advocates of the Affordable Care Act said the agreement was a win for the Obama administration, not least because Mr. Pence is a high-profile Republican and possible presidential candidate whose decision to accept Medicaid expansion funds under the divisive law could give other conservative states cover to do so.

Mr. Pence’s plan is actually a modified version of an existing state health insurance program, the Healthy Indiana Plan, which uses a mix of state and federal money to cover about 60,000 residents who live below the poverty line but are not eligible for Medicaid. Until now, unless they were disabled or pregnant, adults qualified for Medicaid in Indiana only if they had young children and earned less than 25 percent of the poverty level, or about $4,500 a year for a family of three.

A handful of other states have won federal permission to charge premiums to people in the Medicaid expansion population. In Iowa, those above the poverty line are expected to contribute $10 a month in premiums; those making 50 to 100 percent of the poverty line are supposed to pay $5 a month. In Michigan, those making more than the poverty level have to pay 2 percent of their income in premiums.

The Republican governors of Tennessee, Utah and Wyoming are also pushing for alternative Medicaid expansions that would charge premiums to some enrollees.

“It’s just common sense that when people take greater ownership of their health care,” Mr. Pence said, “they make better choices.”