RUSTHOVEN: Pence isn’t playing politics with Sebelius

March 1, 2014

RusthovenThe Washington Post reported last week on Gov. Mike Pence’s meeting with Health and Human Services Secretary Kathleen Sebelius about using federal health care dollars for the Healthy Indiana Plan. This requires extending a current waiver from federal mandates that the money be used to expand Medicaid.

The Post spins this as surreptitious grabbing for Obamacare dollars. Its story, headlined “Republicans seek political cover to accept Medicaid expansion money,” says, “Republican governors in other states are using the same technique, seeking waivers to use Medicaid expansion money to fund alternative programs that would accomplish many of the same goals, but under a different name.”

This is typical of the Post, and typical of misleading national coverage of health care issues. Indiana’s innovative HIP program is not Medicaid “under a different name.” HIP is effective and efficient in making health care available for low-income citizens. Medicaid is neither.

As Pence points out, “Medicaid is not just broke, it is broken. Research shows that the program does not lead to better health outcomes and in some cases hurts the very people it is supposed to help.”

Doubt Pence? Here’s some of the research:

A study in the Annals of Surgery, controlled for age, income and other pertinent factors, looked at nearly 900,000 persons who had major surgeries from 2003 to 2007. In-hospital death rate for persons without insurance was 74-percent higher than for those with private insurance. The same differential for Medicaid patients was 97 percent. Those with Medicaid also had longer hospital stays, and cost more to treat, than those with no insurance.

In 2011, the American Journal of Cardiology published a controlled study of 13,500 patients who had angioplasties. Medicaid patients were 59 percent more likely to suffer later strokes or heart attacks than the privately insured—and more than twice as likely to do so than those without insurance.

Medicaid also significantly limits access to care, including for children. To cite two examples: A 2005 California study of pediatric urologists found 96 percent accepted privately insured patients, but only 41 percent accepted Medicaid patients. A study in the New England Journal of Medicine examined pediatric access to specialty clinics in Cook County, Ill. Researchers, posing as mothers, found major differences in longer waiting times and outright denials of appointments for children on Medicaid.

Reasons for such results are not mysterious. Federal mandates handcuff states in controlling exploding Medicaid costs.

Cutting provider payments is the only big tool in the box. Reimbursement rates have been slashed to 58 percent nationwide (49 percent in Indiana) of the private insurer amount. A 2010 national survey found 54 percent of primary care doctors, and over 45 percent of specialists, won’t accept new Medicaid patients because treatment costs exceed reimbursement.

HIP does not suffer such flaws. It also gives low-income Hoosiers a stake in their health care dollars. Health savings accounts of $1,100, funded by state and participant contributions, cover ordinary expenses; insurance covers the excess. A consumer-driven model encourages healthier lifestyles and getting preventive care (which some 60 percent of HIP enrollees do in year one). Among HIP participants, 99 percent plan to re-enroll.

This, not politics, is why Pence wants to use federal health care dollars to expand HIP, rather than further ensnarling Indiana in the Medicaid morass. It’s a shame he and other governors pursuing sensible alternatives must ask, “Mother, May I?” of the federal government.•


Rusthoven, an Indianapolis attorney and graduate of Harvard College and Harvard Law School, was associate counsel to President Reagan. Send comments on this column to ibjedit@ibj.com.


Recent Articles by Peter J. Rusthoven / Special to IBJ

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