Like Ohio’s John Kasich and four other Republican governors, Indiana’s Mike Pence seriously considered expanding Medicaid eligibility under ObamaCare. But unlike Kasich & Company, Pence ultimately decided against it when HHS refused to grant him one sensible reform.
Established under Mitch Daniels, Pence’s predecessor, the Healthy Indiana program allows uninsured adults aged 19-64 to use a state-based health savings account to pay for medical expenses, such as doctor’s visits, hospital services, diagnostic tests, and prescription drugs. Incentives apply to reward cost-effective spending, but it’s critical to point out that the spending decisions within the account are determined by the policyholder, not the state.
In order to go along with expansion under ObamaCare that increases the eligibility pool for Medicaid, Pence asked permission to use Healthy Indiana accounts to help keep costs down. The request is imminently reasonable. If the purpose of Medicaid expansion is to cover uninsured people, why not let Indiana migrate a state-based program with a 94% satisfaction rating?
Predictably, Kathleen Sebelius’ Department of Health and Human Services said no, preferring to retain federal control over coverage and spending. Without a program like Healthy Indiana in place, costs are likely to spiral upward since Medicaid beneficiaries are not tethered to the consequences of their spending decisions.
So, Pence said no to the Medicaid expansion. But I think it’s crucial to understand that his response was not a kneejerk reaction against helping the uninsured get normal access to healthcare. Instead, he proposed a sensible reform that would have accomplished the same goal as Medicaid expansion, but with more cost certainty for the state budget, and thus less tax receipts from taxpayers.
I’ve speculated before that Pence might be the GOP’s best bet in the 2016 presidential race. A moment like this, even when it doesn’t result in a “win” politically speaking, helps confirm that suspicion because it’s based on sound principles.