Indiana leads in Medicaid change

April 6, 2013

viewpoint-pence-mikeA society can be judged by how it deals with its most vulnerable. When it comes to health care, the best thing for every Hoosier, rich or poor, is more choices and more incentives for preventive care. In the debate over Medicaid expansion, our aim must be to protect the health of Hoosiers in need and maintain the fiscal health of our state. Expanding traditional Medicaid cannot accomplish both.

Much of the talk about Medicaid expansion focuses on whether to take additional funds from Washington to enroll more people. That debate misses the more critical question: How can we provide the best health care coverage to those in need in a fiscally responsible way, both now and in the future?

Indiana, like every state, faces the intractable problem of Medicaid’s skyrocketing costs. The cost to our state is expected to increase from $1.5 billion in 2012 to more than $2 billion in 2015. Left unchecked, the meteoric rise in Medicaid spending will consume more of our budget, leaving less for roads and schools.

My proposed budget fully funds Medicaid through 2015, but we must combat the program’s chronic problems. To do that, Indiana must continue to lead with innovations like the Healthy Indiana Plan.

Proponents of Medicaid expansion argue that Indiana should take advantage of the “free” money the federal government is offering states for the first three years. While this sounds enticing, the state’s actuary estimates that expanding Indiana’s current program would cost our state upward of $2 billion through 2020. Proponents of Medicaid expansion are quick to point out the new federal dollars that will come to Indiana, but remain silent about the long-term negative effects expansion will have on our budget.

Some argue that expansion will have a positive economic impact in Indiana. Let’s be clear: Medicaid is not a jobs program. Our goal should not be to put more people on Medicaid, but to grow the economy, create more jobs, and give workers the ability to make their own health care decisions.

To this end, our administration is focused on educating Indiana’s future work force and creating a welcoming business climate to foster economic development.

The goal of Medicaid is to provide health care for the neediest, but it also should empower recipients to move toward self-sufficiency. Indiana is fortunate to have the Healthy Indiana Plan, enacted with bipartisan support, which has a proven ability to meet this goal and has shifted the Medicaid paradigm in Indiana.

The Healthy Indiana Plan reflects Hoosier values. It has an enrollee satisfaction rate of 90-plus percent and takes an innovative, consumer-driven approach that empowers participants to make healthier, cost-conscious decisions. The program’s Personal Wellness Responsibility (POWER) account incorporates the principle of personal responsibility. Over time, HIP can bend the health care cost curve downward. Medicaid cannot.

Our administration strongly supports HIP and has asked to continue it for the 40,000 current enrollees. We also have renewed the state’s request to use HIP as a vehicle for any possible expansion of Medicaid.

Should the U.S. Department of Health and Human Services agree that our plan offers a worthwhile alternative to Medicaid, Hoosiers can be assured we will carefully examine the benefits of increased enrollment and associated costs before any decision is made.

Any expansion of Medicaid in Indiana must be fiscally responsible and must preserve our ability to continue to lead the nation in consumer-driven health care reform.•


Pence is governor of Indiana. Send comments on this column to ibjedit@ibj.com.


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