Politics

Mitch Daniels vs. ObamaCare

Indiana's governor on what's wrong with last year's health care overhaul-and what must be done to fix it.

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Mitch Daniels, the Republican Governor of Indiana and former Bush administration budget director, does not like the Patient Protection and Affordable Care Act (PPACA) one bit. Over the course of an hour, he describes last year's health care overhaul legislation as "misguided," and "a terrible mistake." He predicts that it will lead to a "slide into top-down single payer by another name." The only hope, he says, is to start over. "I sincerely hope that we will hit the reset button."

Speaking with a small group of health reporters in Washington last Friday morning, Daniels, who is frequently talked about as a potential 2012 Republican presidential nominee, looked slightly tired, and perhaps a little wary of the too-eager members of the press sitting across from him. But his overall message was clear: The PPACA is a problem—a big one—and it needs to be overturned. In the meantime, both Republicans and Democrats need to come clean with the American public about the what sort of health care the nation can actually achieve and afford.

At present, Daniels is especially concerned about the burden the law places on state governments and state budgets. Daniels crafted the Healthy Indiana Program—a consumer-driven health insurance option for the state's low-income population—under a federal Medicaid waiver. The program, which requires a small contribution from enrollees, has shown a marked decrease in emergency room usage, and an increase in preventive care and generic prescriptions. But Indiana may be forced to shutter the program and adopt the far more expensive Medicaid expansion called for by the PPACA.

Projections show that, thanks to the law's Medicaid expansion, his state could eventually be on the hook to the tune of more than $3 billion starting in 2014. In the meantime, the program is already eating away at state budgets. Medicaid makes up more than a fifth of total state spending, and its growth has recently doubled, reaching the highest enrollment in decades. States, already fiscally strapped, are looking to make cuts, but fear that doing so will jeopardize billions in federal funding.

Earlier this month, Daniels wrote a letter (paired with a Wall Street Journal op-ed) to Obama's Health and Human Services Secretary Kathleen Sebelius asking for flexibility—and warning that if Sebelius did not grant states the choice they requested, then the federal government should make plans to manage much of the state-based implementation themselves, as the states would refuse to comply.

At an hour-long meeting with the small group of reporters last Friday, Daniels said he didn't think the administration would comply with his requests. "I do not have great hope of the administration agreeing," he said. "Washington's not famous for listening to governors." That goes for his own party too. "Republicans weren't any better when it comes to federalism." But, he said wearily, "you have to try."

So far, the response hasn't been promising. Sebelius penned a letter to governors suggesting some best practices they might employ to deal with the new health law's Medicaid burden a few days later. The letter didn't name Daniels, but it's clear his letter and op-ed were the proximate causes. Asked about getting attention from the secretary's response, Daniels all but rolled his eyes. "It looked like a polite drop dead, but I don't know." He dismissed the idea that the suggestions had any substantive value. "They're meaningless," he said. "Not only insufficient. People already copy each other. We don't need HHS's help to do it."

That leaves him with few options. "The feds hold all the cards here," he says. And the fiscal reality of the nuclear-option—dropping out of Medicaid entirely, and thus giving up the federal matching funds associated with the program—is "not very attractive." The state would be left without the burden of Medicaid, but would end up needing to find other ways to cover the same population. "I have not seen it as a viable option for Indiana, as delightful as the prospect may be," he said. But he would "cheer on any state that takes that step."

So what does he believe should be done? Besides jettisoning the PPACA and starting over, Daniels says that it is time both parties recognize that Medicare is "completely unsustainable," and will need to be pared back accordingly. "When infinite demand meets finite supply, you have a problem." And his own party, which repeatedly attacked Democrats for cutting Medicare with last year's health care overhaul, has been unwilling admit this. That's a problem. "I didn't think it was a very proud moment when our party decided to denounce cuts in Medicare spending. It's going to have to happen," he said. "To suggest that Medicare is inviolate, that you can't ever reduce spending—that's not helpful." 

He argues instead that the GOP should get specific with the public about what the country can and cannot afford to do—and push policy accordingly. For starters, he wants to make Medicaid look more like his Healthy Indiana Program. He also favors "rigorous" means testing of all entitlement programs and a shift toward "concentrating resources on people who are the most vulnerable." Too many politicians, he says, have "fanatically held onto the idea that you have to send a pension check to Warren Buffet."

But the biggest change he says he'd make is to delink insurance from employment—a change that has been politically impossible because it would require many individuals to let go of their current health insurance. Letting individuals buy coverage when they're healthy and keep it, even through job changes, would go a long way toward addressing current problems with individuals not being able to get coverage because of pre-existing conditions.

More broadly, he says he's looking for "ways to restore the autonomy of individual Americans." There is a "big body of evidence," he argues, showing that when it comes to medical care, "people behave like the smart consumers they are in every other circumstance."

The problem is politicians haven't done a very good job of explaining this to the American public. Daniels declines to speculate on whether or not he'll run for president next year. But if he does, his aim will be to build support for a tough, specific fiscal agenda bolstered by sustainable, affordable health policy. Without that support, he says, there'd be little point in running: "Winning an election without a consensus is not worth very much."

Peter Suderman is an associate editor at Reason magazine.

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52 responses to “Mitch Daniels vs. ObamaCare

  1. If only the nation accepted my reform bill in 1974 that would have developed cheap, affordable HMO’s with no externalaties involved what’soever. To think, right wingers rejected it making the silly claim it would result in the over emphasis of specialist and drive general practitioners out of the health care industry, and that it would drive up costs by misapplying resourced and getting rid of market discipline. Fools. Bet they wished it would have had passed now!

  2. WHEN IT RAINS IT POURS: As the walls come tumbling down!

    [The Cold War Era’s Last Wall]

    Well folks, it looks like the last of the last wall of Cold War Era is showing signs of crumbling even before it is constructed, from the shores of the Emerald Isle Jolly Old England, to the Land of the Rising Sun Japan, the (www.Haaretz.Com), articles [Dollar nosedives to [NIS] New Israeli Shekel as Fischer buys [?515 milion/$650 million], Forex trading turns into an all-out global war], by Moti Bassok and Orr Hischauge, (www.bbc.co.uk.), [A diet for Britain’s defense, by Hugh Cortazzi, and Mr. Cameron’s new “Big Society”], (www.japantimes.co.jp) [LDP seeks new law to develop Okinawa, backing no base goal], [meaning no American-Israeli Military Industrial Complex bases or missiles], (www.japanupdate.com), [Okinawa Governor says he’ll talk Futenma, but wants it moved out], the message seems to be pretty clear that the Missile Wall of the American-Israeli Military Industrial Complex as envisioned in the Grand-Chessboard Strategy, of Full Spectrum Totalitarian Democracy Dominancy in the New World Order to be built around the Russian Federation, and the Peoples Republic of China, with the control of the last oil reserves in the Caspian Sea Basin, and the China Sea simply is out of the question, with the low probability of a large-scale military attack between states its is more prudent to focus upon the integration of intelligence resources and diplomatic means in the prevention of international crises, than the continued large and ever ballooning investment of their [GDP] Gross Domestic Products, and [Extortion Budgets] for the payment of the continued unwanted presence of American-Israeli Military Industrial Complex, Foothold Troops in either Germany or Japan.

    [Humanistic Warfare Strategy]

    The New British Government is working on a new strategic defense and security review drastically cutting the numbers size of its own military, along with support too the American-Israeli Military Industrial Complex as a British Auxiliary Force within the Complex Structure, and will in the future only deploy its forces where it feels the national interests of the [U.K.] United Kingdom, under international law, are at stake, and then only where a viable exit strategy based upon humanistic warfare is the clear goal, [Short, Rapid, and Limited Damage and Loss of Life Warfare, with prompt withdrawal of all forces], is achievable, to this end the [U.K.] will only continue to support its role as Auxiliary Forces of the Military Industrial Complex in Afghanistan with and by providing its support, to that conflict with its [SAS/U.K.] Special Forces, that force to be upgraded with the most modern up to date European military equipment, and training but within the strategy of Humanistic Warfare, not based upon an open ended commitment. At the same time the new [LDP] Liberal Democratic Party, and the Okinawa Promotion Committee, is calling for the removal of all American-Israeli Military Industrial Complex troops and bases from Japan along with its unlawful [200+] Two hundred plus nuclear weapons from the soil of Japan, as it looks to the [U.K.] strategic defense review, too bring about changes in the [21st] Century, of the role of the Japanese Self-Defense in light of possible threats to Japan within the [ASEAN] Association of South East Asian Nations, Sphere of Influence, as Japan has now enters into bi-lateral / [2] two side by side nations The Empire of Japan, and The Peoples Republic of China concerning their mutual interests within the [ASEAN] Sphere of Influence.

    [The Walls Come Tumbling Down!]

    When it rains it pours and the walls come tumbling down! The days of the Cold War did not come to a close when the Berlin Wall fell, what did occur was the end a divided Germany, but a one sided Cold War Strategy remained in the American-Israeli Military Industrial Complex as envisioned in the Grand-Chessboard Strategy, of Full Spectrum Totalitarian Democracy Dominancy in the New World Order, but as with the fall of the [USSR] Union of Soviet Socialist Republics, the cost broke the bank, and the cost of the Military Industrial Complex Wars of Economic Stimulus have gone past the estimate by double and continue to clime, and its debt to the Peoples Republic of China, Japan and Israel continue to grow with no end in sight, as the Military Industrial Complex was short sighted in its view that the enemy would be rapidly defeated as it leadership was decimated, but as fast as the enemies leadership fell yet younger and more dedicated leadership has arisen, and with each passing hour, their strength and resolve grows, and the debt balloons, as [NATO] the North Atlantic Treaty Organization, seeks a political resolution to bring about a Humanistic withdrawal, and the nations of both the East and the West seek to once and for all end the American-Israeli [20th] Century Cold War, Grand-Chessboard Strategy, of Full Spectrum Totalitarian Democracy Dominancy in the New World Order.

    HERCULE TRIATHLON SAVINIEN

    1. HERCULE WAS HERE!

    2. Another Home Run from HERCULE!

  3. “Letting individuals buy coverage when they’re healthy and keep it, even through job changes, would go a long way toward addressing current problems with individuals not being able to get coverage because of pre-existing conditions.”

    Uh, no it wouldn’t, pea-brain. Insurance companies provide coverage on a periodic basis, and if you develop a condition, they cover you for the period, but cut you off from renewing for the next period.

    You can’t cover pre-existing conditions without community rating. Period. End of story. Deal with it.

    The current GOP position is to allow insurance companies to toss those who develop a condition, and deny those who have a condition, which means conditions don’t get covered in an individual market. Only government or job-based insurance keeps pre-existing conditions covered.

    Obama has an answer for this. You don’t like his answer, but you do not have any answer of your own.

    You really think you can “head-fake” us into thinking that you are going to deal with pre-existing conditions when you don’t have any plan that could do so?

    1. Uh, no it wouldn’t, pea-brain. Insurance companies provide coverage on a periodic basis, and if you develop a condition, they cover you for the period, but cut you off from renewing for the next period.

      Because insurance is tied to employment. HIPAA was intended to remedy this but instead turned into a regulatory clusterfuck and gave HMO’s a nice shot of regulatory steroids. All this scheme succeeded in doing was divorcing patients from the true cost of care and allowing incomprehensible billing.

      You can’t cover pre-existing conditions without community rating. Period. End of story. Deal with it.

      Citation please.

      The current GOP position is to allow insurance companies to toss those who develop a condition, and deny those who have a condition, which means conditions don’t get covered in an individual market. Only government or job-based insurance keeps pre-existing conditions covered.

      Why is it incumbent for an insurer to “cover” a pre-existing condition? That is NOT insurance, it is welfare.

      Obama has an answer for this. You don’t like his answer, but you do not have any answer of your own.

      Paul Ryan and Alice Rivlin have come up with an alternative plan

      You really think you can “head-fake” us into thinking that you are going to deal with pre-existing conditions when you don’t have any plan that could do so?

      Again, why is it incumbent upon an insurer to issue a policy for an already existing condition?

      1. “…why is it incumbent…”

        Maybe you should ask Mitch Daniels, DillHole.

        1. Re: Danny,

          Maybe you should ask Mitch Daniels, DillHole.

          “When in doubt, obfuscate.”

          Old Statist proverb.

          1. I really would be interested in subscribing to your newsletter. Do you have the the Old Statist’s Proverbs codified?

            1. I’m actually spoofing KillBill One’s initial credits.

              http://www.imdb.com/title/tt0266697/crazycredits

    2. Re: Danny,

      Uh, no it wouldn’t, pea-brain. Insurance companies provide coverage on a periodic basis, and if you develop a condition, they cover you for the period, but cut you off from renewing for the next period.

      You idiot – that’s the current employer-based system and he’s not talking about that. NORMAL insurance covers you for as long as you pay, like auto, fire or renter’s.

      The current GOP position is to allow insurance companies to toss those who develop a condition

      This is false.

      […]and deny those who have a condition, which means conditions don’t get covered in an individual market.

      Just like many things are not covered in my extended auto warranty. So?

      Only government or job-based insurance keeps pre-existing conditions covered.

      Yes, but that’s only because government thinks its Santa Claus, easy thing to think with someone else’s money.

      1. Tell it to Mitch Daniels, frogpecker.

        1. Re: Danny,

          Tell it to Mitch Daniels, frogpecker.

          Tell him what, Danny? You’re the one making the above assertions, not him.

          1. See my response to DillHole, frogpecker.

            1. What a bore you are.

              1. Do you feel like you didn’t get your money’s worth?

            2. Re: Danny,

              See my response to DillHole, frogpecker.

              You’re not only a boor, Danny, you’re not even a clever one. Pathetic.

              1. A “clever boor”? That would be a strange creature indeed.

                1. Re: Danny,

                  A “clever boor”? That would be a strange creature indeed.

                  And a clever Danny would be cryptozoological.

      2. In fairness, OM, insurance can and does drop people after conditions are developed. There have been several high-profile lawsuits over such practices just in the last few years. It’s just like auto: I continued to pay, but after 3 accidents in 3 years, I was dropped REGARDLESS of my ability to pay increased premiums (Progressive).

        Now, of course, if there really was a free and private market in health care, I would be able to do like I did with my auto, and just find someone else willing to take me on for more money. I don’t think Danny wants to hear that, though.

        1. Re: Jack On,
          I know that, but I was replying to Danny’s assertion that “The current GOP position is to allow insurance companies to toss those who develop a condition.” That’s not the GOP’s position:

          http://www.speaker.gov/Uploade…..-04-09.pdf

          1. Understood, thanks for clarifying.

          2. A list of empty promises?
            That’s your rebuttal?

            1. Seems to me that if you assert that the GOP’s position is x, and it is shown to be y, regardless of your opinion of the validity of the position, you were in fact proven wrong as to your assertion. If you want to argue about how practical the GOP’s position is or whatnot, then do so, but don’t attempt to change the subject when you are shown to be completely wrong.

              1. If you read the link, A$$h07e, you would see that the STATED Republican position is to run ‘high risk pools’ so that the private insurance market can drop those with PECs and fob them off on taxpayers, which EXACTLY matches my statement that:

                “The current GOP position is to allow insurance companies to toss those who develop a condition, and deny those who have a condition, which means conditions don’t get covered in an individual market. Only GOVERNMENT or job-based insurance keeps pre-existing conditions covered.”

                (Emphasis added.) Of course, the GOP is such a self-contradicting, blinkered, programmatically incoherent mess that they have not even been able to deliver on that half-assed promise. Thus, “empty promises.”

                Now that you have been shown to be “completely wrong” are you going to take your own advice and not change the subject?

    3. What insurance companies provide coverage on “a periodic basis?” You completely pulled that out of your ass.

      Anyway, the entire mindset that we can somehow manipulate the insurance business into paying for pre-existing conditions is idiotic. The only reason insurance works is because it is a gamble. Anyone that claims to have a “solution” to pre-existing conditions that involves insurance is a dumbass.

      1. Re: heller,

        What insurance companies provide coverage on “a periodic basis?”

        I think he means the current employer-offered healthcare benefits, but even so, what he implies is not even true – the only thing I have to do each year (i.e. periodically) is choose the type of coverage I want, otherwise the benefit manager will impose the basic coverage (i.e. bare-bones.)

      2. Better go whining to Mitch Daniels about it, Mr. Badass.

        1. Danny|2.16.11 @ 5:27PM|#
          “Better go whining to Mitch Daniels about it, Mr. Badass.”

          So you have no answer.

          1. Why do you guys even bother to feed this troll?

            1. What you’re characterizing as a troll is doing nothing more than pointing out that Daniels’ statement starting

              Letting individuals buy coverage when they’re healthy and keep it

              carries with it meaning in such a way as to constitute a “head fake” as Danny says.

              The only way “letting” makes sense there (since there’s no law against it) is as making insurance cos. continue a policy indefinitely on the same terms by which, for one year, they insured a healthy person. Do you see any problem there??? Do you understand that that’s what Danny meant by entailing either community rating or some gov’t takeover of liabilities?

  4. Projections show that, thanks to the law’s Medicaid expansion, his state could eventually be on the hook to the tune of more than $3 billion starting in 2014.

    There will be zero tolerance for this type of misinformation and unjustified rate increases. We will not stand idly by as states blame their premium increases on the requirement that they provide consumers with basic protections.

    1. why would anyone even listen to this stupid bitch? She’ll be gone in 2012 like the rest of the Obamanations

  5. Letting individuals buy coverage when they’re healthy

    No one’s stopping them now.

    and keep it, even through job changes,

    Already required by federal law. The Health Insurance Portability and Accountability Act. You may have heard of it.

    would go a long way toward addressing current problems

    Since these two preconditions already obtain, I am confuse by this clause.

    with individuals not being able to get coverage because of pre-existing conditions.

    Which is it? Are they healthy when they seek coverage, or do they have a pre-existing condition?

    Fer Chrissakes, this is gibberish.

    Insurance companies provide coverage on a periodic basis, and if you develop a condition, they cover you for the period, but cut you off from renewing for the next period.

    No, they don’t. Renewal is automatic as long as you pay your premiums, no underwriting.

    1. Your confidence vastly outstrips your accuracy.

      No one’s stopping them now.

      … but the tax breaks employers get from offering employment-based insurance serve as subsidies that make individual plans uncompetitive based on price.

      Already required by federal law. The Health Insurance Portability and Accountability Act. You may have heard of it.

      I’ve heard of it. You might try reading it. HIPPA does not provide anything close to a categorical solution for the pre-existing conditions/change of employment dilemma. At BEST it attempts to patch this hole in the current system – moving away from employment-based insurance would completely eliminate this hole.

      Which is it? Are they healthy when they seek coverage, or do they have a pre-existing condition?

      Are you trying to be stupid? The point is that a dynamic, non-employment-based market would enable people to buy insurance and keep that policy in perpetuity, regardless of employer, so that if they develop a condition they won’t face the prospects of having to apply for new insurance at their next employer.

  6. Anyone of superior intellect knows what must be done, but Congress will never do it.

    1. Re: Realist,

      Anyone of superior intellect knows what must be done, but Congress will never do it.

      That’s only because those of superior intellect are not IN Congress…

      1. You are right, but my comment was a smart ass comment using Tony’s reference to himself as a superior intellect.

      2. Which leads to the fundamental problem of government: Those that are willing to seek the levers of power are fundamentally unqualified to operate said levers in a responsible manner because those that have the ambition of seeking power often interested in seeking more power, hence corrupting the concept of limited governance.

        1. …and don’t forget shit floats!

  7. Daniels says that it is time both parties recognize that Medicare is “completely unsustainable,” and will need to be pared back accordingly. “When infinite demand meets finite supply, you have a problem.”

    Yes, you have something which economics calls “shortages.” Under a free market system, prices convey an accurate picture of availability, which assures no shortages. Instead, when distortions exist, either through price floors, price caps or supply constraints, shortages (and black markets) will appear, due to excess demand or excess supply.

    For instance, unemployment is an example of excess supply due to price floors; long waiting times to see a doctor is an example of shortage by excess demand or constrained supply.

    1. Well, there is the rise of PAs, ARNPs, and the of the DNP to fill in the gaps that the small supply of primary care doctors already in existence leaves open, attending to routine, non-emergent care needs and at the same cost if not cheaper than visiting a primary care physician.

      The other side of that coin is nurses very much tend to be in the tank for ObamaCare, largely because nurses deliver care, but are not charged, for the most part, with cost containment.

      1. I am happy that my nurse wife is an exception to that generalization.

  8. “He predicts that it will lead to a “slide into top-down single payer by another name.” ‘

    Did it ever occur to him that this is exactly what it was designed to do?

  9. Danny|2.16.11 @ 4:48PM|#
    “Insurance companies provide coverage on a periodic basis, and if you develop a condition, they cover you for the period, but cut you off from renewing for the next period.”

    Poor, poor Danny, what a sad excuse for a moral agent!
    Can’t even read a damn contract without his mommy leaning over his shoulder.
    Well, Danny, maybe there’s hope, You might grow up one day

  10. Ted Kennedy |2.16.11 @ 4:41PM|#
    “…Bet they wished it would have had passed now!”

    No, Ted, you were lying then and everybody knows it.

    1. I wasn’t lying. I was passed out during that vote. Didn’t think they would actually pass that crapshoot of mine! God, I worked with idiots.

  11. Hey look, Mitch Daniels wanted prison reform (but was defeated http://www.indystar.com/articl…..dyssey=nav|head). He also wants to ignore, or wanted a truce on social issues, and is pretty reliably fiscally conservative. He’s the Republican candidate libertarians might be able to vote for (if he runs).

  12. Enjoyed every bit of your website.Thanks Again. Great.

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