Indiana passes health reforms, Medicaid pay boost for doctors

A 44-cent cigarette tax increase will pay for a plan to insure up to 130,000 Hoosiers and fund several other health initiatives.

By Doug Trapp, AMNews staff. May 21, 2007.

Washington -- Indiana lawmakers approved a $206 million boost in the state's cigarette tax to pay for various health initiatives late last month, including a health plan for low-income residents and a Medicaid pay raise for doctors.

The 44-cents-a-pack increase brings the state's tax to 99.5 cents per pack, the 37th highest rate in the U.S. About $155 million of the increase will pay for the Indiana Check-Up Plan, a health insurance program that will provide:

• Up to $500 annually in preventive care paid by the state.
• Personal Wellness Responsibility Accounts, similar to health savings accounts. Workers, the state and employers contribute $1,100 toward health expenses.
• Basic health coverage for enrollees who exhaust the $1,100 in their accounts in any one year.

Indiana Check-Up is expected to provide up to 130,000 low-income residents with health insurance. Although that is just a fraction of the 500,000 people in the state without insurance at any one time, lawmakers and others said the bill is one of the most significant pieces of health care legislation in many years.

Financing is always a factor in how much can be accomplished, said Vidya Kora, MD, president of the Indiana State Medical Assn. and an internist in Michigan City.

"Even though it did not solve the problem of the uninsured in its entirety, most people felt this was the best they could get accomplished based on how much money was at the table," Dr. Kora said. The ISMA called for a $1 increase.