HADLEY HEATH MANNING • | JULY 29, 2014 | 6:00 AM
Indiana's Republican Gov. Mike Pence has proposed changing the state's Medicaid program, called the “Healthy Indiana Plan.” He says his plan doesn't expand Medicaid, but others on the Left and the Right argue that it does.
While Pence’s plan is better than a blind expansion of the broken government insurance program for low-income people, his “Healthy Indiana Plan 2.0” does not align with conservative principles, nor does it take Indiana in the right direction.
Medicaid has many problems: Not only is it costly for taxpayers, but it fails those who depend on it the most. Medicaid participants face bleaker health outcomes than people with private insurance.
This is in part because they have difficulty accessing primary care. A study published in Health Affairs found that nearly a third of primary care physicians are unwilling to take any new Medicaid patients.
Furthermore, Medicaid patients have little individual choice in how they spend their health dollars. They do not get to choose what is covered, nor do they get to choose which health providers will accept them, leaving them with a limited ability to choose whom they see for treatment.
It's laudable that Pence (along with others) have tried to solve this problem. The original Healthy Indiana Plan, put into place by Pence's predecessor, Mitch Daniels, has been praised as an alternative Medicaid model.
This program sought to give individuals using Medicaid more control and more options by creating accounts similar to Health Savings Accounts, which beats traditional Medicaid any day.
Pence’s plan expands the program, raising the current eligibility level from 100 percent of the poverty line to 138 percent of the poverty line.
It also establishes different levels of plans, called HIP Link, HIP Basic, and HIP Plus. Two of these plans come with POWER accounts, similar to HSA accounts, but pre-funded with $1,100 in government money.
Some conservatives argue that because Pence has had to negotiate with the Obama administration for a waiver, HIP 2.0 had to make some concessions.
But a better solution would be to avoid negotiating at all with the federal government on this issue because President Obama and the Department of Health and Human Services do not have conservative principles.
They want to expand the government’s role into people’s lives, and no federal grant is worth joining in advancing that aim.
And that's where Pence's plan goes wrong: It makes more people dependent on the government for their health care.
Although he quoted President Reagan as he unveiled his Medicaid plan at the American Enterprise Institute, his plan goes against Reagan's suggestion that “we should measurewelfare's success by how many people leave welfare, not by how many are added.”
Medicaid — and other safety net programs — are supposed to be about serving the poorest of the poor, but HIP 2.0 would extend Medicaid benefits to more than 375,000 able-bodied adults — more than three-fourths of whom have no children.
Adding more middle-income people to Medicaid not only comes with uncertain and high costs, but sadly it crowds the program, making it less secure for the truly indigent poor.
A growing number of health policy experts are pointing out the shortcomings of Pence's plan. Writers at Forbes debunk Pence's argument that his plan is a block grant, saying:
“By definition, Medicaid block grants give states a fixed, lump sum of federal dollars in exchange for broad autonomy in providing Medicaid benefits.
"Pence’s plan features neither of these elements. Under Pence’s Obamacare expansion, Indiana will draw down increasing amounts of Obamacare in exchange for adding more people to the Medicaid rolls.”
It sounds nice, for the sake of bipartisanship, for Republican governors like Pence to work with the Obama administration to find solutions to our Medicaid problems.
But sadly in this case it comes at the expense of conservative principles, and what’s best for Indiana citizens.
Pence has done many things right in his career as a lawmaker and an executive, but this latest plan is not conservative, and it's not beneficial. It's Obamacare's Medicaid expansion, with a few tweaks and a new name.
Hadley Heath Manning is health policy director at Independent Women's Voice.