Indiana officials blast feds for 'over-regulation' on reform

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In a prickly Halloween response to proposed federal rules on health-insurance exchanges, Indiana officials said the regulations are more trick than treat.

Michael Gargano, secretary of the Indiana Family and Social Services Administration, blasted the rules for containing “glaring omissions” as well as creating new and unfunded “mandates” not included in the 2010 health reform law that called for the creation of the online marketplaces.

“In many respects, the breadth of the proposed regulations appears to be HHS' attempt to enforce an unfunded mandate,” wrote Gargano, referring to the U.S. Department of Health and Human Services, which is writing the new rules. “The extent of the regulation is unwarranted, unnecessary and potentially damaging to any effort to develop an efficient and cost-effective Exchange.”

Gargano’s letter, addressed to HHS Secretary Kathleen Sebelius, is the latest example of Gov. Mitch Daniels and his administration criticizing the health reform law, which is called the Patient Protection and Affordable Care Act. Daniels himself has loudly and repeatedly criticized the law and its implementation, including through op-ed columns in the Wall Street Journal.

“Our federal overlords have ruled,” Daniels wrote in the newspaper three days after President Obama signed the law. “We better start adjusting to our new status as good Europeans.”

In January 2011, Daniels issued an executive order to study whether Indiana should operate a health insurance exchange or whether it should simply join a federal exchange that HHS will establish. The Affordable Care Act provides federal funding to help states operate exchanges for two years—in 2014 and 2015—but the funding stops after that.

Gargano, who oversees the state agency spearheading Indiana’s response to the law, especially bristled at proposed rules that would extend beyond federal funding of the exchanges.

“Indiana questions what enforcement authority HHS maintains over state-based Exchanges after 2015 when there will be no continued federal funds to support Exchange operations,” Gargano wrote in response to an HHS proposed rule that significant changes to the exchanges after 2015 first receive HHS approval. “If HHS intends to retain approval rights after 2015, then this legislative mandate must be funded.”

In 32 pages of examples, Gargano repeatedly points to provisions in the proposed rules that he finds overly prescriptive and that he says will drive up costs for Indiana and other states.

He ticks off 18 separate provisions that, he says, are regulations not called for in the Affordable Care Act.

“The purpose of regulations are to clarify and carry out existing statutes, as opposed to creating additional, undefined requirements,” Gargano lectured Sebelius. He added, “Every additional requirement imposed on state-based Exchanges will increase costs to operate the Exchanges and, ultimately, the costs for consumers and for publicly funded insurance affordability programs.”

One of his loudest objections is to a provision that would require states to use state employees to determine the eligibility of applicants to the Indiana Medicaid program. Instead, Indiana wants to use contractors, who would be cheaper because they are not paid benefits and also could be signed on for the burst of activity that would come during a proposed annual enrollment period.

Gargano estimates that the state would save as much as $1.6 million a year by using contract workers instead of adding employees to the state payroll.

Determining Medicaid eligibility is a key part of the Affordable Care Act—and a key point of Daniels’ criticisms. The law requires all states to expand Medicaid eligibility up to 133 percent of the federal poverty limit—or about $30,000 per year—for a family of four.

Currently, Indiana’s eligibility levels are at or above that level for children. But for adults, only those with incomes up to 25 percent of the federal poverty limit—or about $5,800 for a family of four—qualify for Medicaid.

The local office of Seattle-based actuarial firm Milliman Inc. has estimated the Medicaid expansion would add 500,000 Hoosiers to the program, on top of the 1 million currently enrolled, and cost the state an extra $135 million to $185 million per year—after the expansion is funded the first two years by the federal government.


  • Avoid Paying benefits
    Two main methods are used in the health reform law to extend coverage to the uninsured: regulate insurance markets and extend Medicaid. States administer this program thus are required to apply eligibility rules. Gargano objects to paying benefits to eligibility workers. What part of universal coverage does he not understand. We need someone in that position committed to the goals of the program

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.