Obamacare

Mike Pence's 'Market-Based' Plan to Reform Medicaid Is Actually a Deal Between Hospital Lobbyists and the Administration to Expand Obamacare

The Republican governor's supposedly free market plan is a big industry giveaway.

|

American Enterprise Institute

After months of negotiation with the Obama administration, Republican Gov. Mike Pence has cut a deal for Indiana to become the 28th state to expand Medicaid under Obamacare.

The deal, and the conservative-friendly terms it is being presented in, reveal how eager Pence is to portray his participation as something other than a cave to the administration and a giveaway to hospital lobbyists.

The Indiana deal is based on a proposal, first introduced last May, to expand the program under the aegis of the state's 2008 Medicaid pilot, known as the Healthy Indiana Plan (HIP). Pence described his proposal, dubbed HIP 2.0., as a multi-tiered plan with different service levels that would rely partially on health savings accounts, and required beneficiaries to pay a small monthly premium or risk losing coverage.

When the proposal was introduced, Pence restated his opposition to Obamacare, and described his plan as an alternative. "Reforming traditional Medicaid through this kind of market-based, consumer-driven approach is essential to creating better health outcomes and curbing the dramatic growth in Medicaid spending," he said, according to the Indiana Star.

Some of those elements—in particular, the requirement that some beneficiaries pay small monthly premiums that would be deposited into a health savings account—were controversial with supporters of traditional Medicaid program, and since May of last year, Pence and the administration have negotiated over the details.

Pence's announcement today makes it clear that the governor got at least some of what he wanted. On Twitter, the governor noted that the plan "includes elements that have never before been approved by [the federal government] for a program of this magnitude," a Tweet that links to a slide noting the inclusion of health savings accounts. This suggests that the administration was willing to bend somewhat in order to encourage participation in the Medicaid expansion.

But while premiums will be part of the reform, they will be essentially meaningless for those before the poverty line, where most benefits cannot be cancelled for non-payment. In addition, the administration notes in a press release that the deal did not include a work requirement. 

Pence, meanwhile, is still trying to frame the plan as a conservative reform. "Medicaid isn't a program we should expand," he Tweeted today. Instead, he said, it's one "we should reform & that's exactly what we accomplished with HIP 2.0."

But of course the deal is an expansion of Medicaid under Obamacare. That's why the administration wanted it and agreed to it. Pence obviously knows that it is an expansion. His previous Tweet declared that effective next month, the HIP plan "will be available to more Hoosiers than ever before." 

Even more desperately, Pence also insists that the program "will be fully funded at no additional cost to [Indiana] taxpayers" and "will require no new state spending and no new taxes." This is only true in a way that hardly matters. Obamacare's Medicaid expansion is funded federally; according to the Congressional Budget Office, the expansion will cost more than $900 billion over ten years. 

Indeed, the lure of federal money is one of the major reasons Pence signed onto the plan. As Philip Klein of The Washington Examiner noted last May, Pence's office worked closely with hospital lobbyists to develop the expansion plan, which the Indiana Hospital Association approved. In essence, Pence brokered a lucrative deal between the hospital lobby and the Obama administration using taxpayer money, then decided to tout it as a "market-based" plan. 

NEXT: Anti-Vaping Researchers Called Out for Misleading Cancer Exaggerations by New York Times Columnist

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Even more desperately, Pence also insists that the program “will be fully funded at no additional cost to [Indiana] taxpayers”

    Who can pass up a free lunch?

  2. I, for one, am shocked.

    SHOCKED, I tell you!

  3. Get Paid Up To $23.75 Per hour w?w?w.W?i?k?i-Careers.C?o??m
    – No Experience Necessary
    – Beginners preferred
    – No websites needed
    – No CPA
    – No PPC
    – No One Click Wonder
    – No Fake Gurus
    – JUST REAL RESULTS
    Click Here For Details

    1. Get Paid Up To $23.75

      Check-plus for a very specific amount, huge minus for the “up to” phrase. Try again.

    2. But I like fake Gurus.

    3. Scammers getting personal. I like. =)

  4. Between this and The Mike Pence Propaganda News Network, he’s really been a boon to the great state of Indiana.

    OT: Mine protester sentenced to some prison time after stealing equipment from the mine during a protest.

    Her post-sentencing statement is the greatest thing I’ve read in months:

    ” The “lifestyle enforcement” aspect of my five year probation mandate (post-jail time) with full-time employment stipulation, is culturist, and out-of-touch with today’s employment landscape. Innumerable individuals work seasonal jobs for life in a responsible manner, thus Judge Fox’s ruling is based on the disappearing myth of the white American Dream that supports and enforces a destructive capitalist regime. In conjunction, Judge Fox exploited my sentencing hearing to serve as a symbolic trial for my identity as an anarchist, my appearance, and my ongoing affiliation with indigenous communities, extending to my adamant stance against industrial resource extraction- this is unacceptable, yet predictable. The judge seemingly desires to stifle dissent from all things wild and free, and may as well have based his sentence off a hypothetical book in progress entitled, “White Pride and Prejudice,” as the words fell from his mouth in a narrow, out-dated, and white-male privileged world perspective, and does not support or embrace hunting, fishing, or gathering.”

    1. Though I wish no harm on Stacey Saari, a geologist hired on G-TAC’s dollar, it saddens me that she continues to despise the fiber of my being, and continues to support industrial resource extraction that in turn supports death to the poorest of peoples in rural/wilderness landscapes. The clich?’ of “just doing your job” is no excuse to participate in colonial violence via corporate resource extraction.

      Gee, I can’t imagine why she hates you. Doesn’t everyone love to be called a murderer by White Indians trying to destroy their livelihood?

    2. He left out gamboling.

    3. Its like he wants to make sure that there is at least one Republican governor on the ten most loathsome politicians in America list.

      Indiana is a pretty level headed state. How in the hell did they end up with this assclown?

      1. Indiana is a pretty level headed state

        [citation needed]

        In my experience, Indiana is just Illinois without a Chicago to draw attention to itself.

      2. “How in the hell did they end up with this assclown?”

        Body Armor.

    4. That statement ROCKS!

    5. “Consequently, colonization is everywhere, so decolonization must happen everywhere.”

      Translation: The human population must be reduced to “sustainable” levels.

  5. So what does Gruber have to say about this?

    1. “please insert $400,000 USD for reply”

  6. Well, there is this:

    Hospitals are going to absorb the cost of these new Medicaid patients anyway. Hospitals generally run margins of no more than 3% in a good year (there are exceptions, but mostly on the downside).

    By law, they are not allowed to turn these patients away.

    They are going to lay those costs off on somebody. Either the “private” pay/insured population, or (partially) on the government via Medicaid.

    So, you can either impose a stealth tax on the private pay/insured population, or you can impose a more overt tax on, you know, taxpayers.

    1. “So, you can either impose a stealth tax on the private pay/insured population, or you can impose a more overt tax on, you know, taxpayers.”

      The first one is cheaper and needs no union clerks.
      I’ll take it.

  7. They are going to lay those costs off on somebody.

    The Faerie King?

  8. “will be fully funded at no additional cost to [Indiana] taxpayers”

    No, this time we’re not lying. Seriously, it’ll work. I promise. No joke. Really, you can trust us. OK, honestly, we’re telling the truth.

    1. We’ve reached the point where everything has to be magically free.

      Ah, the truthiness of it.

  9. The “lifestyle enforcement” aspect of my five year probation mandate (post-jail time) with full-time employment stipulation, is culturist, and out-of-touch with today’s employment landscape.

    That’s just, like, your opinion, Man.

  10. Hi peter,

    Maybe we should just go with single payer. France pays a third of what we pay per capita and they live longer.

    But that’s not really why I’m here. I love other people’s good fortune so I just thought I’d give a big round of congratulations to you and the writers at Reason. It lolokd like big pay raises for corporate-schilling reactionaries are in order. Keep a bottle of Dom cold for me, would ya?

    http://mobile.nytimes.com/2015…..paign.html

    1. I smell shit.

    2. After 100+ years of Marxist and left-wing economics wrecking one country after another, it is *you*–the allegedly futuristic leftoids–who are the tired, stale reactionaries.

    3. american socialist|1.27.15 @ 3:09PM|#
      “Hi peter,
      Maybe we should just go with single payer. France pays a third of what we pay per capita and they live longer.”

      Hi, shitpile,
      Still picking those lefty cherries? Paid your mortgage yet? Still licking mass murderer ass?

    4. “lolokd”? is that like a portmanteau of lol and looked?

    5. amsoc:

      It lolokd like big pay raises for corporate-schilling reactionaries are in order.

      Whereas american socialists get their funding from the proceeds ofcommunal hemp farms.

    6. “France pays a third of what we pay per capita and they live longer.”

      http://en.wikipedia.org/wiki/Auguste_Escoffier

      1. Without this “Rags to Riches” “Chef” AMSOC you would never experience the elegant foods you are used to, while you take you private jet to the Davos party.

    7. AS,

      The problem with people like you is that you think you are somehow special.

      I’m not a libertarian so don’t confuse me with these guys. Just because your mother deemed you worthy to exit her vagina instead of killing you doesn’t mean that you’re entitled to my stuff. You, your family, your kids, dog, cat, whatever mean jack shit to me.

      I don’t need you AS, I don’t need any of the little poor people, I don’t need any of the shit you’re peddling. That rich guy that you hate so much though, yea I need him, he provides a salary, he pays for innovation, he has the resources to make shit. Your ilk, all you wanna do is take stuff for free for no other reason than you’re breathing.

      So essentially what I’m saying is that whether you have healthcare and live to 90 vs not having healthcare and dying at 60 doesn’t mean anything to me and I really don’t care. That’s your problem.

    8. It is true that the USA spends disproportionately for the results in health. I don’t think single payer is responsible for the difference, but other problems.

      1. Limited supply is always the problem for price increases.

        If Dufuss opened more medical schools with the money he proposes to offer two more years of high school, the cost of healthcare would go down.

      2. Limited supply is always the problem for price increases.

        If Dufuss opened more medical schools with the money he proposes to offer two more years of high school, the cost of healthcare would go down.

      3. Limited supply is always the problem for price increases.

        If Dufuss opened more medical schools with the money he proposes to offer two more years of high school, the cost of healthcare would go down.

        1. does the fact that you tripled the demanded quantity of your comment supplied lower it’s value?

      4. Indeed, there are a few countries that spend even less public money than the US on healthcare but are as well-rated as us; Cyprus is one I think.

    9. Are you people really still using the word “reactionary?” Fellow, you subscribe to the system made up in the 19th century by a primitivist who didn’t know what shaving was and believed in the utterly discredited labor theory of value. You’re the one living in the past; you’re the socioeconomic equivalent of a creationist.

      And here’s a fun activity: go to this page: http://en.wikipedia.org/wiki/Healthcare_in_Europe

      Copy the first table into Excel, and make a scatter plot between ‘European ranking’ and ‘Public funding’, then click the ‘show trend line’ option.

      There is no correlation between the extent to which healthcare is publicly funded and the efficiency of the system. See for yourself.

  11. ‘Market-based’ = company gets paid

  12. The Republican governor’s supposedly free market plan is a big industry giveaway.

    *Shocked Face*

  13. Has anyone actually read all the fine details or watched any of Pence’s speeches on this topic? This blog is a strawman attack on a consumer-based approach to healthcare. This puts people in charge of their healthcare and is meant to be temporary. Eventually people have to get a good job so they can get their own health insurance. What do you people think about that?

    1. So instead of starting my own business, and being able to afford my own health insurance, or being able to afford health insurance for any employee’s, I can only afford to work for someone else in order to afford health insurance.

      Sounds like a shitty deal.

  14. True enough, but like the stock mkt, you’re a fool to bet against the Fed. In this case, you have to realize that what we call the free mkt, is hardly free, and skewed towards those who can pay, a segment, which, thanks to the Fed, is increasingly leaving the rest behind. We have a choice: either give them welfare; or stop printing money which inflates assets owned mostly by the 1%. It’s like telling GM to stop making Cadillacs and make more Chevys. They won’t, and neither would Humana or any of the rest.

  15. my buddy’s step-sister makes $89 hourly on the laptop . She has been fired for 8 months but last month her income was $16413 just working on the laptop for a few hours. Get the facts………

    http://www.Jobsyelp.com

  16. just before I saw the bank draft four $7417 , I did not believe that…my… sister was like actualie receiving money part time from their laptop. . there friend brother had bean doing this 4 only six months and just paid for the mortgage on there place and purchased a new Honda NSX .
    read this post here======= http://www.jobsfish.com

Please to post comments

Comments are closed.