Tag Archives: Indiana

Gov. Mike Pence highlights Milliman’s Healthy Indiana Plan research

In his recent Wall Street Journal editorial (subscription required), Indiana Gov. Mike Pence cited Milliman studies pertaining to the Healthy Indiana Plan (HIP). HIP is the state’s Medicaid expansion program designed to cover individuals who are uninsured with incomes up to 200% of the federal poverty level (FPL). Here is an excerpt from Gov. Pence’s editorial:

The Healthy Indiana Plan (HIP) now provides health-savings accounts, or HSAs, to nearly 40,000 people and empowers them as health-care consumers. According to a Milliman analysis of HIP and traditional Medicaid claims, 7% fewer HIP members used the emergency room in 2012 compared to traditional Medicaid enrollees.

Another Milliman study showed that 60% of HIP enrollees in 2012 obtained preventive-care services such as annual physicals and flu shots—a rate similar to that of the general commercial marketplace. HIP enrollees choose generic drugs at a much higher rate than people covered by other private insurance plans.

When HIP was first implemented, Milliman’s Rob Damler analyzed patterns of care and pent-up demand in the newly enrolled population; for more on this analysis, reference this 2009 paper. For more Milliman perspective on the Healthy Indiana Plan, click here.

Identifying high-risk members under a Medicaid expansion program: Experience in Indiana

Alternative Benefit Plan (ABP) regulations have created the ability for states to offer benefit plans tailored to the needs of a particular population, such as the Medicaid expansion population. These regulations require exemption for vulnerable populations, including one new exempt population: the “medically frail.” This population includes foster care children and those who meet Social Security disability criteria, but also includes anyone with a serious and complex medical condition or a disabling mental or chronic substance use disorder.

States are seeking a methodology to help them identify the medically frail, one that would be both accurate and administratively efficient. This paper describes a methodology that has been used successfully for identifying a similar population in the Healthy Indiana Plan, a Medicaid expansion program initially authorized in 2008 under 1115 waiver authority.

The devil is in the details

Looking for a good example of how very small, relatively off-the-radar provisions of the health reform law can have big implications? Here’s what the American Medical Association has to say today about Medicaid expansion cost estimates in Indiana:

Indiana’s estimated spending under the health system reform law will be $333 million lower than an earlier estimate by the same consultant.

Indianapolis, Ind.-based Milliman Inc. had calculated in a May 21 report that Indiana would spend at least $2.9 billion to implement the law between 2014 and 2020. But a follow-up Milliman report released Oct. 18 reduced that estimate by about $333 million due to a revised Centers for Medicare & Medicaid Services interpretation of the health reform law (www.in.gov/aca/files/AffordableCareActFinancialAnalysisUpdateOct2010.pdf).

Federal law requires manufacturers to provide rebates to states and the federal government for certain drugs. CMS indicated in April that the health reform law increased the federal share of these rebates to include certain existing state rebates, but CMS in September clarified that the federal government would not take any existing Medicaid state rebates, said Marcus J. Barlow, spokesman for the Indiana Family and Social Services Administration. This reduced Indiana’s cost under health reform.

The devil is in the details, and many details are still in flux.

Utilization in Indiana

A new article in Modern Healthcare looks at the Healthy Indiana Plan, a Medicaid expansion program that has yielded some interesting results. Here’s an excerpt from the Modern Healthcare piece:

While the jury is still out on how well the health savings account and preventive-care incentive are working, analysts have looked at utilization trends among the newly insured and found that those signing up for the program are sicker and more frequent users of healthcare than those enrolled in commercial, employer-sponsored health plans.

The Healthy Indiana Plan “population used more care than the typical commercial population in Indiana with the same age and gender characteristics,” says Rob Damler, principal at Milliman, a consulting and actuarial firm. Damler is the consulting actuary to the state of Indiana on the health plan.

Childless adults enrolled in Healthy Indiana, for instance, had nearly three times as many inpatient services as private plan members in the first year. And pharmacy use was nearly 50% higher than a typical commercially insured population.

This newly enrolled group was also sicker than the general population. Their relative morbidity was 65% greater than their peers covered by private health insurance. The earliest enrollees to the program also proved to be the sickest, with the highest healthcare costs, Damler says.

This phenomenon is called anti-selection, where the least healthy population seeks healthcare coverage available to them, driving up the costs to insurers and the population covered.

The Healthy Indiana Plan offers some considerations for national reform, Damler says. “One of the issues that needs to be understood is pent-up demand,” he says. “We need to be prepared that the newly insured may cost more in the first 12 to 24 months than the insured population.”

Not surprisingly, insurance companies say that without a federal law requiring everyone to carry health insurance, national healthcare reform won’t work because the chronically ill will sign up for coverage in large numbers, driving up costs, while the healthy will stay on the sidelines.

“It only works if everyone’s covered,” says Alissa Fox, senior vice president of policy at the Blue Cross and Blue Shield Association.

Healthy Indiana Plan: Enrollee utilization

The Healthy Indiana Plan (HIP) is a Medicaid expansion program that offers perspective on the cost and utilization patterns of the uninsured as they enroll for coverage and access care. What follows is an analysis of the experience data from this program.  


Illustrating cost patterns during initial period of enrollment

The HIP populations also followed a particular pattern of utilization during the initial enrollment period. Figures 7 and 8 show measurements of inpatient, outpatient, pharmacy, and physician expenditures relative to average PMPM costs, first for caretakers and then for non-caretakers (for explanation of these populations, see the full paper). The 100% line measures the average PMPM for the first year of coverage for the population represented.


Figure 7: Caretakers



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Illustrating anti-selection

This week we announced the availability of a new paper that looks at the Healthy Indiana Plan (HIP), a voluntary Medicaid expansion program in Indiana. Among other things, the analysis assigns risk scores to enrollees based on their relative health and expected healthcare costs. This figure illustrates the average risk score for enrollees in the first months of the program. It looks at both of the populations modelled in the analysis: caretakers (those with dependents on Medicaid) and non-caretakers.

Average risk scores by month of enrollment


What does this mean? The paper provides some perspective:


HIP started in January 2008. In the first month there were very few people enrolled, so January numbers are not significant. But, starting in February, very meaningful numbers of people were enrolled. We charted those who enrolled in February, tracking their eventual risk scores. We did the same for each subsequent month of enrollees, tracking each group of new enrollees for the first six months and measuring their Medicaid Rx risk scores. The figure above shows that among those who enrolled in the first three to four months of HIP, caretakers had an average risk score ranging from 1.2 to 1.4; non-caretakers had a score between 1.6 and 1.8. Starting in May, June, July, and August, new enrollees were not as high risk or expensive, with risk scores 20% lower; the difference in health status primarily drove the decreased risk and cost.

What does this tell us? The first to enroll in this voluntary program had higher morbidity, with relatively healthier people enrolling a bit later.