Republican Indiana Gov. Mike Pence wants to repeal Obamacare. But in the meantime, he’ll accept federal funds for the health law’s Medicaid expansion.
Pence announced in a turnaround last week that he would take the expansion money to grow the state’s own program — the Healthy Indiana Plan — to cover low-income individuals who would qualify for traditional Medicaid under the Affordable Care Act’s Medicaid expansion.
But he wants to make his opposition to the health law — and commitment to repeal — very clear.
“Obamacare needs to be repealed for many reasons, including that it is pushing a massive, flawed Medicaid program onto states,” Pence said at an American Enterprise Institute event Monday. “Once Obamacare is repealed, [Indiana’s] consumer-driven plan will serve as a model for what block-granted Medicaid programs can be in states across the country.”
Obamacare calls for the expansion of Medicaid coverage to all individuals below 138 percent of the federal poverty level, but the Supreme Court left the decision to the states. Twenty-six states plus D.C. have opted into expansion, but a handful of red states have refrained, in protest against the entitlement program and the health care law.
Republican governors have found themselves in sticky territory — wanting to avoid a coverage gap in their state, but more vehemently wanting to avoid giving their implicit stamp of approval to Obamacare.
Some, like Pence, have tried to find workarounds that would take the federal funding and expand coverage to low-income residents, but through a private, market-based approach that is more palatable to Republicans. Arkansas led the way with its “private option” plan, and others, such as Pennsylvania and Indiana, have followed suit.
The Indiana alternative — HIP 2.0 — would expand on the existing state program, and include three different plan options: HIP Link, HIP Plus, and HIP Basic. All include a Personal Wellness and Responsibility, or POWER, account that is intended to function like a Health Savings Account; require a contribution from the patient; and emphasize prevention, with a penalty for unnecessary emergency-room use. They are intended to be temporary plans, until consumers are able to work their way up to transition into the private insurance marketplace, Pence says.
HIP Link is a premium assistance program for people with access to employer-based coverage but who may not be able to afford the plans. HIP Plus is for individuals below 138 percent of the federal poverty level who make their POWER contributions, while HIP Basic is for those below 100 percent FPL who do not make their required contributions. HIP basic includes a less comprehensive benefits package and prescription-drug benefit. Those above 100 percent FPL risk losing their coverage entirely if they don’t make their contribution; those below 100 percent must make co-pays and receive fewer benefits until they are able to contribute again.
Pence insists that his proposed expansion of the Healthy Indiana Plan is not Medicaid expansion, and is not Obamacare. But he is seeking to pay for the program using Obamacare dollars, even as he continues to call for the law’s repeal.
Of course, if Obamacare were repealed, Pence would not have the funding he seeks to implement HIP 2.0.
The Indiana proposal is currently in the comment period, and Pence plans to submit the waiver application to CMS sometime next month. The federal government will need to approve the request in order for the plan to move forward.
“We haven’t shaken hands on this deal yet,” Pence said. “But I’m hopeful.”