Pence Touts ‘Consumer-Driven’ Obamacare Medicaid

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Peter Fricke Contributor
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Last week, Indiana Gov. Mike Pence became the latest Republican to accept an expansion of Medicaid offered to states through Obamacare, touting it as a “consumer-driven” version of Medicaid.

Pence applied to the Department of Health and Human Services last July for a waiver that would allow him to build on the Healthy Indiana Plan (HIP), a “consumer-driven model [that] incentivizes patients to take greater ownership over their health care decisions,” as an alternative to expanding the traditional Medicaid program.

Under Obamacare, states are incentivized to expand Medicaid coverage to individuals with incomes at or below 138 percent of the federal poverty level through federal subsidies that pay the full cost of the expansion for the first three years. (RELATED: Court Okays Republican Challenge to Arizona Medicaid Expansion)

To date, 28 states plus the District of Colombia have accepted the Medicaid expansion, including 10 states with Republican governors.

In a press release announcing approval of the request, Pence said that “HIP 2.0”, as the expanded program is called, will give 350,000 uninsured Hoosiers access to quality health care, with coverage beginning Feb. 1.

“The expanded and updated HIP 2.0 is based on a program that has been serving 60,000 low-income Hoosiers in our state for seven years,” Pence said, calling it, “a proven model for Medicaid reform across the nation.”

According to the Indianapolis Star, HIP 2.0 “goes beyond standard Medicaid expansion by requiring that participants contribute to the cost of their care,” at a cost of between $1 and $27 per month. (RELATED: Gruber in 2009: Obamacare Will NOT be Affordable)

The contributions would go toward a so-called POWER account, similar to a health savings account (HSA), which allows individuals to save money tax-free for health care expenses.

Participants will be rewarded with lower contribution requirements for engaging in “healthy behaviors,” such as quitting smoking, but will face mandatory co-pays, or even loss of coverage, if they fail to make the required contributions.

HIP 2.0 also includes a co-pay for emergency room use, which the governor’s press release says is “designed to encourage appropriate use of the emergency room.”

Opponents of HIP 2.0, however, are concerned that it requires low-income individuals to chip-in for their own health coverage, believing such a scheme is at odds with the underlying goals of Obamacare.

Timothy Jost, a law professor at Washington and Lee University and a healthcare reform expert, told the Star that because HIP 2.0 targets people who are at or near the poverty line, many will likely struggle to make the required payments, and might even elect not to participate in the program at all.

In an op-ed for the Muncie Voice on Monday, Todd Smekens adds that, “the governor wants this to be a major victory for conservatism, but he’s accepting federal Medicaid dollars which will fund 100% of the programs cost.” (RELATED: White House: Red States Have Saved Federal Taxpayers $88 Billion by Rejecting Medicaid Expansion)

Moreover, he says, Pence himself has acknowledged that the federal subsidies will only cover 90 percent of the expansion after three years, at which point “the remaining 10 percent will be covered through Indiana’s hospitals and revenue from the state’s cigarette tax.”

“Tea Party Libertarians,” Smekens points out, “see this as an intrusion of the federal government and want to abolish or repeal the Affordable Care Act,” not use taxes to fund an expansion of it.

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