Indiana Gov. Mike Pence is testing the proposition that the Republican Party can be the party of reform and the little guy, not the dogmatic libertarian party that treats abstract principles, rather than people, as the lodestar for politics and governance. In coming to talk today to the American Enterprise Institute — whose president, Arthur Brooks, has been on a mission to spread the former vision — Pence took on a knotty subject, Medicaid reform, and put his conservative reputation on the line.
Pence is in Washington to renew the pilot program of his state’s Medicaid reform plan, known as the Healthy Indiana Plan, and to extend it to all Medicaid recipients. His revamp would replace traditional Medicaid with a plan that combines a defined contribution benefit (in essence a voucher) to allow the working poor to buy insurance or lower the cost of employer-provided coverage along with a health savings account, into which beneficiaries can make their own contributions and obtain a higher level of benefits. In exchange, Pence is willing to expand Medicaid coverage for people earning up to 138 percent of the poverty level. Pence argued, “Medicaid doesn’t need to be expanded or abolished. It needs to be reformed.” His waiver request is now pending with the Department of Health and Human Services.
Pence is plainly an admirer of Brooks’s mantra of “earned success,” the idea, as Pence put it, that “people are happier and more motivated if they build something of their own.” Unlike Mitt Romney, his success builders aren’t just entrepreneurs, but police officers, teachers and the working poor getting on the ladder of success. If you combined the wonkishness of Rep. Paul Ryan (R-Wis.) with the inclusiveness and blue-collar appeal of the late Jack Kemp, you get a sense of where Pence is coming from.
During his 12 years in the U.S. House of Representatives, Pence was a fiery conservative, and while his message and agenda (cutting taxes, balancing budgets) hasn’t changed, the shift from Washington back to Indiana has helped define him as a “solutions conservative,” which for many on the right in Congress is an oxymoron. During his 30-minute talk, Pence assured the conservative audience over and again that he was in favor of repealing Obamacare, but he insisted that to do that means to reform Medicaid, demonstrating what post-Obamacare, block-granted Republican health care would look like. He forcefully asserted his determination to repeal Obamacare and to offer an alternative. This perhaps is an indication of political realism. The far right may well pummel him because, gosh darn it, Republicans don’t reform — they repeal and cut! Yes, that’s the mentality Pence faces.
His delivery was steady and optimistic, albeit understated. With square jaw and gray hair, he radiates calm rather than combativeness, an absorption with details rather than a rhetorical flair. An attendee observed earnestly, “He seems to be one of the more sincere politicians.” Indeed, in his anecdotes about the working poor and emphasis on his fellow Hoosiers, Pence urged Republicans not to focus on the cost savings (even though HIP promises to bend the cost curve) but on the people he aims to help. He criticizes Obamacare for “failing to give [the working poor] the benefit of the doubt and … failing to believe in them.” In his telling, “respecting the dignity of every Hoosier including the working poor” seeks to incentivize work (HIP includes a referral to job training programs), allows people to control their own health care and seizes power back from Washington.
It is unclear whether the administration will approve Pence’s waiver, but he says he is optimistic. The administration will certainly look hypocritical if it stymies a GOP governor’s attempt to close the coverage gap for modest-income Americans. If the waiver is successful, and if Pence can persuade ordinary Republicans that his brand of state-centered reform is authentically conservative, his stock for 2016 will certainly rise. For now, he gets credit for challenging the idea that the GOP is anti-government and anti-poor.