September 19, 2014
By Naomi Lopez Bauman

This article was written by Naomi Lopez Bauman and featured in Northwest Indiana Times on September 19, 2014. 

Once Gov. Mike Pence’s Medicaid expansion plan, Healthy Indiana Plan 2.0, or HIP, undergoes required revisions to obtain federal approval, it is not going to be the same plan approved by Indiana lawmakers.

As part of the Affordable Care Act, states may choose to expand Medicaid eligibility up to 138 percent of the federal poverty level. Pence is negotiating federal approval of his plan, which would primarily expand health coverage to able-bodied adults with incomes up to $15,856 from a previous level of $11,670 under the current HIP.

The plan originally submitted for federal approval is predicted to cost $18 billion through 2020, with the state paying $1.5 billion of that total. But according to a recent analysis by State Budget Solutions, a nonpartisan public policy organization, the plan could actually cost the state an additional $2.9 billion and threaten almost 177,000 Indiana jobs.

Responding to criticisms that HIP 2.0 will create a new entitlement at a high cost to taxpayers, the governor’s staff said:

“The plan will not increase taxes for Indiana taxpayers at any time and is financed through existing funding sources. Our plan includes the continued support of a trust fund for the program to ensure there are adequate reserves. Further, in keeping with the original program values, the state will automatically terminate the expansion program at any time if the anticipated funding sources are reduced or eliminated.”

The problem with this promise is two-fold. First, federal rules do not allow a state that has expanded Medicaid to scale back on the covered populations – for any reason.

The secretary of the U.S. Department of Health and Human Services has full discretion to deny a state from rolling back expansion population Medicaid coverage, even if the federal government breaks its funding promise to the state. So unless there is a change in federal code, that promise is worthless.

Second, the promise that taxes will never be increased to support this expansion is based on a hypothetical plan.

Exactly how much the Obama administration will water down Indiana’s cost-sharing provisions, which are the best approach to hold down local costs, remains to be seen. If other states provide any indication, Indiana taxpayers will have another reason to be wary of this promise.

What’s more, the federal government could very well change the payment rules on states. There has already been an attempt to cut the federal share of Medicaid dollars through the federal budgeting process.

For all the good intentions of providing health-care coverage to Indiana’s uninsured, the reality is there are much better approaches that have a realistic chance of achieving this goal – without being a massive burden on state taxpayers. Florida, Kansas and Louisiana have adopted approaches that allow Medicaid patients to select private plans that best meet their own needs and preferences, and these programs are delivering higher-quality care for patients at a lower cost.

Indiana lawmakers have already given Pence free rein to negotiate the HIP 2.0 plan with federal officials. No other approval from lawmakers is needed for the governor to implement the program, even though federal approval will likely be contingent upon significant plan changes.

Hoosiers should not allow lawmakers to cede their own authority. The public should have the opportunity to openly consider and debate the federally approved final plan. After all, we all know what happens when lawmakers have to pass legislation to find out what it means.

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TAGS: ACA: Affordable Care Act, Medicaid