Republicans seek political cover to accept Medicaid expansion money

February 25

In the bitterly partisan debate over the Affordable Care Act, few House members criticized the proposed legislation as harshly or as often as then-Rep. Mike Pence. But now, nearly four years after the measure passed on a party-line vote, Pence, now Indiana’s governor, is asking the federal government for ACA money to expand a program that provides coverage to low-income Hoosiers. But he wants to do it outside the confines of the health-care law.

Pence is among a small but growing number of GOP governors and lawmakers looking for alternatives to expanding Medicaid. They don’t want to be seen embracing a law that is almost universally loathed in their party, but the hundreds of millions of dollars available to their states through the law’s provisions are too enticing to pass up.

“Obamacare was a mistake. It was, to borrow a phrase, a bad idea poorly executed,” Pence said in an interview. “But where I work, it’s about solutions. People are looking for results.”

On Friday, Pence met with Health and Human Services Secretary Kathleen Sebelius to ask for a waiver for the Healthy Indiana Plan, which helps about 45,000 low-income residents with personal health funds linked to insurance plans with high deductibles. Pence wants to use the federal money earmarked for Indiana’s Medicaid expansion to grow that program instead.

“I’ve made it very clear that I have no interest in expanding traditional Medicaid in Indiana,” he said. “I think Medicaid is a deeply flawed system. I think it’s broke, and broken, and it ill serves the people that are covered. We’re currently in negotiations with the administration about using the resources that are available for Medicaid expansion to expand the Healthy Indiana Plan.”

Republican governors in other states are using the same technique, seeking waivers to use Medicaid expansion money to fund alternative programs that would accomplish many of the same goals, but under a different name.

“There’s a lot of trying to say they’re not doing Obamacare so that they can call it something different,” said Diane Rowland, a health policy expert and executive vice president at the Kaiser Family Foundation. “They’re trying to put some distance between the straight concept of a Medicaid expansion so they can build a coalition in the legislature.”

Pennsylvania Gov. Tom Corbett (R) has sought a waiver to include work requirements in Medicaid expansion, while Utah Gov. Gary R. Herbert (R) said last month that he will push to expand Medicaid in some form during this year’s legislative session.

Wisconsin Gov. Scott Walker (R) has performed his own version of this political jujitsu: His state has curtailed Medicaid to the point at which it covers only those who make up to 100 percent of the federal poverty level — $23,550 for a family of four. Those who earn more and who don’t have dependent children are covered under BadgerCare, a program that receives Medicaid funding.

The Healthy Indiana Plan, meanwhile, creates an individual account similar to a health savings account, linked to a high-deductible health plan. Low-income residents pay a percentage of their income into the account, and the state has preventive-care incentives that have saved money. Pence has asked HHS for a long-term waiver, extending a temporary waiver his state received for the first time in 2008.

“I would say we had a cordial and substantive and serious discussion, and they’ve invited further discussion. We’ve made it very clear it would have to be within the framework of consumer-driven health-care principles,” Pence said. “I’d like to in fact end traditional Medicaid in Indiana for all non-disabled adults and use the Healthy Indiana Plan as a framework.”

In New Hampshire, the state Senate has agreed on a plan that ultimately will use federal Medicaid money to pay for private insurance for those newly eligible for Medicaid. Gov. Maggie Hassan (D) said that her state’s Democratic-controlled House preferred a straight expansion of Medicaid, as other states have done, but that the state Senate, which is narrowly controlled by Republicans, would not approve it.

That resulted in a compromise that will put those citizens who are newly eligible for Medicaid under the Affordable Care Act on the Medicaid rolls for now and eventually transition them to private insurance.

“What was important to conservatives was that we not permanently expand Medicaid,” Hassan said in an interview. “Our goal was to get people covered as quickly as possible.”

Arkansas legislators are trying to pass a similar measure that would use the Medicaid money to fund what they call the “private option.” State law requires three-quarters of both legislative chambers to approve any appropriation; the private option has passed the Republican-controlled Senate and remains just two votes short of passing the GOP-led House.

Arkansas Gov. Mike Beebe (D) said several governors from states that have not expanded Medicaid have approached him to learn more about the private option. The word “private” is a cover in states where anything associated with President Obama’s signature domestic policy achievement would be politically unpalatable.

“Different governors in different states say, ‘Hey, I like what you all are doing in Arkansas,’ ” Beebe said. He declined to name the governors who have sought his counsel.

Even if the differences between an alternative state program and traditional Medicaid are cosmetic, being able to say a state has requested a waiver can be a political benefit.

“A waiver makes it sound like they’ve negotiated something different and gotten a better deal,” said Rowland of the Kaiser Foundation. “Most of the states that are on the fence or negotiating waivers are trying to expand Medicaid.”

In Indiana, that’s a clear political winner: A survey conducted in November by the Bowen Center for Public Affairs, based at Ball State University, showed that 51 percent of Indiana residents wanted to repeal the Affordable Care Act. But 47 percent said they agreed with Pence’s decision to expand the Healthy Indiana Plan, compared with 32 percent who wanted to extend traditional Medicaid and 15 percent who said they didn’t want to extend coverage at all.

“We are encouraged by Governor Pence’s commitment to helping cover more of the state’s uninsured population through the Healthy Indiana program,” Joanne Peters, an HHS spokeswoman, said in an e-mail. “As we have done with other states, we are eager to work with Indiana to provide the best options that work for Hoosiers. HHS is committed to supporting state flexibility and working with states on innovative solutions that work for them, while also improving care and lowering costs for residents.”

Dan Balz contributed to this report.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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