Only now is Pence team starting Medicaid talks

Gov. Mike Pence is in no hurry.

That became crystal clear Monday when Pence announced that his administration won approval from President Obama’s team to expand the Healthy Indiana Plan, or HIP until the end of 2014. But he said talks have yet to begin on using HIP to expand Medicaid coverage for low-income Hoosiers

That go-slow approach could push a possible expansion of Medicaid coverage in Indiana to the end of 2014.

If so, Indiana would lose out on one year of federal subsidies, promised by President Obama's 2010 health reform law.

“We’ve really had no discussions at all on the bigger issue,” said Debra Minott, secretary of the Indiana Family and Social Services Administration, after the press conference in the governor’s office at the Indiana Statehouse.

That means as many as 300,000 Hoosiers will remain uninsured next year that would qualify for Medicaid, if Indiana expanded eligibility up to 138 percent of the federal poverty limit, as called for by Obamacare.

Pence acknowledged those Hoosiers, but said his team is just starting to bargain to cover them, if at all.

“Now that we’ve accomplished this [extension of the HIP program], we’ll continue good-faith discussions [with the Obama administration] about the uninsured in Indiana,” Pence said. Later, he added, “There’s a lot of time between now and the end of 2014.”

That last comment suggests the Pence administration is willing to wait that long to get the deal it wants from Obama. Minott clarified that a deal could be struck any time between now and then, but she added that an expansion would require administrative changes that could be difficult to make before the end of 2014.

To be fair, it looks like President Obama and his team are also OK with leaving 300,000 Hoosiers uninsured. They could have, of course, told Pence straight away that he could use HIP to expand coverage to them, after Pence asked for that authority in April.

Meanwhile, it looks like all the states surrounding Indiana will expand their Medicaid programs, creating odd disparities, especially for low-income residents that live along Indiana’s borders.

Also, there’s a compelling argument that, by not expanding Medicaid coverage, Indiana employers will pay higher health insurance premiums than their peers in neighboring states. That’s because commercial insurance—which is purchased by either employers or by families individually—subsidizes that hospitals incur to care for the uninsured.

Asked whether he was concerned about such a development, Pence emphasized that uninsured Hoosiers could still obtain health care via hospital charity care programs, via publicly subsidized health centers and other public health programs.

“Let’s make sure there’s a distinction in the language between health insurance and health care,” Pence said.

No health policy expert believes those resources are adequate to provide the ongoing care needed by uninsured Hoosiers, and it does not appear Pence does either. He touted the HIP program, for instance, because “it moves people from emergency room care to primary care.”

But Pence thinks the consumer-driven features of the Healthy Indiana Plan are so good, and the problems with the traditional Medicaid program are so bad, that he’s willing to live with a less-than-ideal solution for another 16 months, if necessary. The Healthy Indiana Plan is based on health savings accounts, which its 37,000 beneficiaries use to pay their first $1,100 of medical expenses each year. HIP was originally designed so all recipients had to pay something into those accounts.

“I just think that HIP is in the interests of the health of Hoosiers,” Pence said, explaining, “You’re creating an incentive for people to invest in your own health.”

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