Pence pitches health plan proposal in Washington

May 19, 2014

The health insurance expansion Gov. Mike Pence is touting relies on federal Medicaid money and meets federal Medicaid requirements, but the Republican governor insists it's not Medicaid.

Pence is asking the federal government to pay for an expansion of the state's Healthy Indiana Plan, saying his plan is much better than traditional Medicaid. He took his pitch to Washington, D.C., on Monday, unequivocally telling an audience gathered at the conservative American Enterprise Institute that his plan is nothing short of Medicaid reform.

"Last week, my administration announced plans to submit a waiver to the Centers for Medicare and Medicaid Services to replace traditional Medicaid in Indiana for all able-bodied adults with an expanded version of the Healthy Indiana Plan," he said.

But national conservatives, his longtime support base, have been treating his proposal as equivalent to the expansion of federal health care they ardently oppose.

Whether Pence's proposal is in fact an expansion of Medicaid may depend on point of view as well as how "Medicaid" is defined.

Kosali Simon, a health economist and professor at Indiana University's School of Public and Environmental Affairs, said the law creating Medicaid is specifically designed to allow states to develop their own options for administering the law. By that definition, Pence's proposal is an expansion of Medicaid.

"It's Medicaid because it fits into the definition of what states are allowed to do: States are allowed to ask for waivers," Simon said.

But she notes that if one defines Medicaid as "not deviating at all" from how the federal government asked states to expand Medicaid, then Pence's proposal is not Medicaid.

Indiana is among a handful of states that have proposed accepting the federal expansion of Medicaid on their terms. Arkansas and Iowa won waivers allowing them expand Medicaid coverage with some key changes, like providing payouts to low-income residents to purchase insurance on the health insurance exchange.

Pence's plan calls for a series of major changes from how Medicaid expansions in other states have worked.

The first part of the "Healthy Indiana Plan 2.0" would allow adults earning less than 138 percent of the federal poverty level to enroll in the state's hybrid health savings account plan. If the residents pay a small monthly fee, they would be enrolled in "HIP Plus," which provides dental and vision coverage, as well as better prescription coverage. If residents miss their payments, they would drop down to "HIP Basic," which does not include vision and dental coverage and other "extras".

"HIP 2.0" also establishes "HIP Link", a nod to Arkansas, which would have the state subsidize low-income workers whose employers offer health care benefits but are too expensive for the workers.

But the details include some key features of Medicaid, specifically measures that Health and Human Services officials asked for when they rejected a similar proposal submitted by former Gov. Mitch Daniels. The addition of dental and vision coverage, as well as not being able to kick residents out of the program if they don't make payments, were key features of the federal Medicaid expansion.

And the program is also funded heavily by federal Medicaid dollars.

David Roos, executive director of Covering Kids and Families of Indiana, and other health care advocates in Indiana pushed hard for an expansion of traditional Medicaid, but have largely rallied around Pence's proposed alternative.

The Pence proposal includes many key facets and requirements not found in traditional Medicaid, he said.

"It's definitely not Obamacare," Roos said. "I think it's a new critter. I think it's exactly what (waivers) are supposed to be: it's a compromise."


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