Pence’s Bright Idea Beats Obamacare

Calling the ACA 'deeply flawed,' Indiana governor insisted on health care reform with conservative fiscal principles in place

Mike Pence, the Republican vice presidential candidate, has been accused of endorsing the Affordable Care Act while serving as governor of Indiana.

Yet the plan he implemented in his state is significantly different from Obamacare — and it’s already working.

Healthy Indiana Plan 2.0 (HIP) requires Medicaid beneficiaries to make contributions into a health savings account or risk losing coverage.

Pence has criticized the ACA vehemently. Earlier this year in January, before he became Donald Trump’s veep candidate, he published an op-ed in the Indy Star, where he denounced it soundly: “Obamacare is a deeply flawed law with its mandates, taxes, and overreaches. Obamacare was never the right solution for Indiana or the nation, and it should be repealed.”

At first glance, the Medicaid expansion Pence implemented in Indiana could appear a move in support of the health care law. Under the ACA, states were required to participate in the public marketplaces, but they could choose whether or not to expand Medicaid within their states. Pence chose to expand — but he insisted on certain conditions.

Medicaid historically has covered low-income children, pregnant women, the elderly and disabled individuals, and some parents. Other low-income adults have been excluded. The ACA expanded Medicaid coverage to all adults with incomes at or below 138 percent of the poverty line, which is about $16,200 a year, or $33,865 for a family of four. So far, 32 states have expanded the Medicaid coverage.

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Indiana’s expansion took a more fiscally responsible form. Pence negotiated with the Obama administration to create the Healthy Indiana Plan 2.0 (HIP), which requires Medicaid beneficiaries to make contributions into a health savings account or risk losing coverage. As little as $1 a month suffices, but all beneficiaries must make those payments. The state government matches those contributions and then uses the funds to cover claims expenses.

Other states haven’t taken similar measures because the ACA promised the federal government would cover 100 percent of all new enrollees from 2014 to 2016. But Pence cares deeply about doing his part to diminish the $19 trillion national debt.

In a year in which numerous insurance giants have been leaving the marketplaces, Indiana still has four carriers.

It turns out his decision to expand Medicaid probably made the Indiana insurance marketplace more reliable. One analysis from the Kaiser Family Foundation discovered ACA marketplaces work better and have more competitive insurance offerings in states where the government has expanded Medicaid. In a year in which numerous insurance giants have been leaving the marketplaces in droves, Indiana still has four carriers.

The Healthy Indiana Plan has had some startling successes. Emergency room visits are down by 42 percent — indicating patients are seeking preventative care instead. HIP also provides job training and placement services, which has helped improve the state’s employment rates.

Pence is adamant about what the ACA does to employment: “Obamacare is a job killer. I’ve lost count of the number of small-business owners in the state of Indiana, and as I’ve traveled around this country as a candidate for vice president, who have told me they will not hire that 50th employee, they stop at 49, and that’s to avoid the additional strictures that come under Obamacare,” he said in his op-ed.

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“Obamacare did not create the Healthy Indiana Plan,” Pence wrote. “HIP existed before Obamacare, and it will exist after Obamacare. Unlike Obamacare, HIP is popular, successful, bipartisan, and has demonstrated results.”

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