Healthy Indiana 2.0 (A Workable Healthcare Solution)

by John McClaughry

What to do about Medicaid is a recurring question in Washington and Montpelier. Fortunately, there’s a solution. It’s called Healthy Indiana.

Prof. Regina Herzlinger of Harvard Business School explained its success this week. Each acute care Medicaid beneficiary buys a high deductible major medical health care plan, with state funding, and then pays normal health expenses from a health savings account, called a Power Account, which is also partly state funded.

Herzlinger cities the research findings: “Comparing enrollees who used health savings accounts with those who didn’t,  showed that the former used more primary and preventive care, adhered better to their drug regimens, missed fewer appointments and showed up less frequently at the emergency room.”

“Although Indiana’s “basic” traditional Medicaid was free, those in Healthy Indiana Plan were charged 2% of their income, but did not have to make copayments. If payments weren’t made for six months, they would lose insurance. Yet the program remained popular: 70% of enrollees contributed and 86% described themselves as satisfied, according to a survey from the Lewin Group last summer. As more data are gathered, policy makers can better understand what beneficiaries want and how Medicaid dollars can be efficiently spent to meet their health needs.”

EAI has been advocating this approach here for twenty years or more – but of course, the people running Vermont then and now are so fixated on handing out free stuff that they won’t try anything different.

- John McClaughry is vice president of the Ethan Allen Institute.

{ 2 comments… read them below or add one }

H. Brooke Paige February 16, 2017 at 5:36 pm

Imagine that, a market based Medicaid program that empowers the enrollees to make choices based on their economic self-interests ! Who would have thought that would work ?

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Jim Bulmer February 18, 2017 at 2:13 pm

Nothing new here, if it’s not invented in Montpelier, it can’t be worthwhile. In Montpelier, they take “testimony” but they only follow those who support their predetermined position. Those who present opposing views are ignored.

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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