Not counting Indiana, 23 states have yet to move forward with some form of expansion.
Like several other Republican-led states, Indiana plans to apply for a waiver that will allow it to use federal Medicaid expansion funds to purchase coverage for adults earning up to 138% of the federal poverty level.
These other states, in a trend that started in Arkansas, are using the money to help residents buy private plans sold on the insurance exchanges. Pence, however, would use the funding to cover more residents in the program known as the Healthy Indiana Plan, which offers low-cost insurance paired with health savings accounts.
The proposal, known as the Healthy Indiana Plan (HIP) 2.0, provides two levels of coverage: one for residents living above 100% of the federal poverty line, and one below. Those living under will be able to get basic health coverage and can choose to pay a monthly contribution ranging from $3 to $15, depending on income, to get access to dental or vision benefits. Those who don't pay the premiums would be responsible for copayments for services other than preventive care.
The CMS has so far declined to allow states to collect premiums from beneficiaries earning less than the federal poverty level. Indiana residents with incomes above the poverty level would have to pay $25 a month and would be locked out of the program for six months for failure to pay.
The CMS previously rejected a proposal from Pence to draw additional Medicaid funding under the healthcare reform law by adding 400,000 residents to the Healthy Indiana Plan, in part because the plan included an enrollment cap.
The governor's office estimates HIP 2.0 would provide a coverage option for 334,000 to 598,334 Hoosiers who have incomes under 138% of FPL.
Before the waiver is submitted to the CMS, there will be a 30-day comment period and two public hearings taking place May 28 and May 29.
A CMS representative said the agency is pleased that Indiana is considering some sort of Medicaid expansion and is looking forward to seeing Pence's proposal.
Joel Ario, former director of HHS' Office of Health Insurance Exchanges, said political makeup in the remaining holdout states make it unlikely any of them will opt for a traditional Medicaid expansion.
“They'll likely pursue some sort or privatized option, because they like the idea of personal responsibility,” said Ario, now a managing director at Manatt Health Solutions, speaking at Global Health Care's Health Insurance Exchange Summit the day before Pence unveiled his plan. “That movement is likely to expand to a number of states.”
Follow Virgil Dickson on Twitter: @MHvdickson