Pence's HIP 2.0 insurance expansion has national aspirations all over it

May 19, 2014
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There’s no mistaking it.

If you read through the 46 pages of Gov. Mike Pence’s proposed expansion of health insurance for low-income Hoosiers, it’s clear that Pence wants to influence health policy around the country.

At the very least.

At most, Pence's Healthy Indiana Plan 2.0 plan is his opening salvo in a serious 2016 presidential run.

“It’s far more ambitious than anything I had anticipated,” said David Roos, executive director of Covering Kids & Families of Indiana. Roos, who is one of the keenest observers of Medicaid policy in Indiana, called Pence’s HIP 2.0 plan “audacious” and “breathtaking.”

“It’s a remarkable conservative document,” he said.

It’s remarkable because it’s more than just a sneaky way to claim the Obamacare money for expanding health insurance, as Business Insider called it.

Pence's plan is nothing less than an attempt to roll back liberal policy on low-income health benefits as far as currently possible. It is a playbook meant to be mimicked by conservatives in Washington and in state capitols in all 50 states.

This is a plan that “eliminates traditional Medicaid” for everyone in Indiana except for children and the disabled.

That means able-bodied adults on Medicaid and even the “medically frail” (who are disabled but not quite as severely as those categorized as aged, blind and disabled) will be required to make co-payments for medical services or else make contributions to HSA-like POWER accounts they will use to pay their bills. Conservatives like Pence insist that even the poor should be able to take some personal responsibility for their health care purchasing decisions.

Pregnant moms, who right now switch off of HIP onto Medicaid once they get pregnant, will now stay on HIP and keep using their POWER accounts, but they’ll have all the benefits of traditional Medicaid, including no co-payments or POWER account contributions.

HIP 2.0 even provides a way for children currently enrolled in the Children’s Health Insurance Program, or CHIP, to move into private insurance. That’s because HIP 2.0 offers premium assistance for low-income adults who work at employers that offer health benefits.

And, in an attempt to move Hoosiers off Medicaid/HIP benefits, all HIP applicants will be referred right away to the state’s Department of Workfroce Development for job-search and job training-programs.

“I have long advocated for the repeal of ObamaCare. Yet Republicans have been talking for even more years about reforming Medicaid. That’s what we’re doing in Indiana,” Pence wrote Monday in an op-ed piece in the Wall Street Journal titled “The Smarter Way to Provide Health Care for the Poor.”

“If and when we elect a president and Congress willing to give Medicaid back to the states as a flexible block-grant, I’m confident that states will craft programs—like the Healthy Indiana Plan—that empower low-income Americans to take control of their own health-care choices and provide them access to quality care,” Pence wrote.

Pence still faces three challenges to make that happen.

First, he has to convince the Obama adminsitration to sign off on his plan. In a briefing with reporters last week, Pence's health policy adviser Brian Neale cast HIP 2.0 as a plan created to answer all the objections of the Obama team.

Second, the Pence administration will have to make this plan work. Roos, the Medicaid expert, noted that having HIP participants move back and forth between Medicaid benefits, HIP plans and employer plans will be hard to administer without creating disasters like the “eligibility modernization” fiasco that beset Pence’s predecessor, Mitch Daniels.

Third, Pence will have to convince his fellow conservatives that it’s possible to advance principles of free enterprise and personal responsibility and fiscal prudence without, before all else, repealing Obamacare.

That may be easier said than done. Conservative pundits at Forbes and the Heritage Foundation hammered Pence for simply falling for the Obamacare bait.

But, clearly, Pence is going to try to change their minds—and perhaps their votes.

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  • HIP 2.0 Is Expanded Medicaid With A Few Twists
    I have railed against Pence for the last year for his seemingly indifference to Hoosiers without health insurance. Although I think national politics and tea party ideology have driven his actions, I am glad to see him finally doing something to help the uninsured. HIP 2.0 seems like a good starting point for discussions with HHS but I don't think the Medical Savings Account part of HIP 2.0 will survive HHS's review. Rather, I believe the best bet to address personal accountability will be co-payments in the range of $10-20. I also believe the HIP 2.0 is essentially a Medicaid expansion with the state relying on ACA money and the hospitals and doctors getting a higher reimbursement. While not a full fledged Ponzi scheme, Pence is using some hocus pocus and a few twists to make his plan look superficially different than the ACA. The good news is that thousands of the uninsured might soon get coverage.
    • HIP 2.0 reinforces the status quo
      Governor Pence is a master at sleight-of-hand, as was Mitch Daniels: Tobacco lawsuit proceeds that fund anything other than tobacco cessation efforts, in a state that has one of the highest levels of tobacco usage in the country, as well as one of the lowest levels of overall health; money that inexplicably goes missing from the education account, forcing our already-underfunded public schools to cut teachers and increase class sizes, and then when the money is "found" in another account, it is NOT restored to the school districts; taxpayer funds for vouchers to private schools to supposedly increase competition and thus foster excellence - and, surprise, surprise - 95% of the schools to whom the vouchers go are religious - vouchers are just a back-door way for conservatives to fund religion while avoiding the appearance of violating that whole separation of church and state "thingy" in the Constitution. And now, HIP 2.0, one more scam. It allows Pence to accept federal money for health insurance while creating yet another Pence-controlled bureaucracy, and will do very little to improve the health of poor Hoosiers. People who are already stretched to the limit by rising food and fuel costs are somehow supposed to come up with co-pays and contributions to HSA-type accounts - thus maintaining the status quo: "Do I put gas in my car to go to work, or go to the doctor for that pain I've had for the past 6 months?" "Do I get my crumbling teeth looked at or try to buy at least the same amount of groceries as before, even though my kids are growing, and need more?" I had hoped that the Governor had some genuine concern for the increasing number of poor in our state, and our worsening health. Should have known better. HIP 2.0 is a way for Pence to take the money, create yet more government in a state that has more layers of government than almost anywhere else, burnish Pence's cred among ultra-conservatives, and position himself for a run at the Presidency in 2016, long before the negligible results of HIP 2.0 become apparent.

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