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Pence files plan to expand coverage using state-run alternative to Medicaid

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INDIANAPOLIS — Gov. Mike Pence on Tuesday asked that the federal government expand health care coverage for Indiana's low-income residents using a state-run alternative to traditional Medicaid.

Pence's proposal, dubbed the Healthy Indiana Plan 2.0, would still rely on billions in federal aid to cover residents earning up to 138 percent of the federal poverty level, like states that approved the Medicaid expansion included in the federal health care overhaul. But Pence and his supporters contend it supports personal responsibility in a way Medicaid doesn't because it would rely on health savings accounts and patient input.

The plan expands on the state's existing Healthy Indiana Plan, which has been covering about 35,000 to 45,000 low-income residents for the past six years. Pence wrote in a letter Tuesday to Health and Human Services Secretary Sylvia Burwell that he wants to expand that concept.

"Because the consumer-driven model incentivizes patients to take greater ownership over their health care decisions, Healthy Indiana Plan members utilize health care services in a more responsible manner than traditional Medicaid. The program is also very popular in our state among Healthy Indiana Plan members and non-members alike," he wrote.

If approved, the program would cover up to 458,000 low-income residents without health insurance. State analysts expect the proposal to cost roughly $18 billion through 2020, with Indiana paying $1.5 billion and the federal government covering $16.5 billion.

The plan marks a bit of a political balancing act for Pence. On the one hand, he has won support from Indiana Democrats and health care advocates and sparked anger from conservatives who say he has abandoned his principles on the issue. On the other hand, Pence has argued that the federal health care law needs to be repealed.

The federal government will now begin its review of the request, including seeking public comment. Pence filed a separate request Monday seeking to extend the current state-run plan three more years if the expansion is not approved.

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