Gov. John Kasich of Ohio was the first potential 2016 candidate to get snared in the Obamacare/Medicaid media snafu. As one of several GOP governors who expanded Medicaid, he naturally defends that move, which in an Associated Press interview came out as a defense of Obamacare, to which the Medicaid extension was attached. Kasich clarified his view, but the liberal media, Democrats and potential 2016 opponents may think they have their gotcha quote.


Ohio Gov. John Kasich signs legislation about the Brent Spence Bridge project in Cincinnati in June. (AP Photo/The Cincinnati Enquirer, Gary Landers)

Kasich, however, is correct that one can be for repealing Obamacare and still support states’ expansion of Medicaid. But other governors should be forewarned: You better be crystal clear about what you want to do.

Kasich may not be the only Republican governor who winds up on the GOP presidential ticket in 2016 to confront this problem. Chris Christie of New Jersey, Rick Snyder of Michigan and Susana Martinez of New Mexico all expanded Medicaid. Mike Pence of Indiana is seeking to expand it. Lost in the kerfuffle (a reminder of how treacherous pre-presidential positioning can be) is a critical point about the future of Medicaid: Few Republicans support keeping Medicaid as is.

Most visible is Pence, who is waging a battle with HHS to reform Medicaid by implementing market reforms in the Healthy Indiana Plan (including health savings accounts) to all poor Hoosiers.

In an op-ed in May, Pence argued that his waiver to the Centers for Medicare and Medicaid Services was designed “to replace traditional Medicaid in Indiana for all able-bodied adults ages 19-64. Instead we will provide an expanded version of the Healthy Indiana Plan for those with income up to 138% of the federal poverty level, or about $33,000 for a family of four.” He explained:

The plan would offer three options: a premium assistance plan that helps low-income working Hoosiers get employer coverage, and two health-savings account plans with varying degrees of coverage. The premium assistance program helps people who cannot afford their employer’s health plan or do not have access to a plan. They could receive an HSA to use for premiums, copayments or deductibles to get their employer’s plan. Plan members would be responsible for making monthly HSA contributions on a sliding income scale.

Contributions also are required for all HIP members who choose one of the HSA plans. Those earning above 100% of the federal poverty level risk losing their coverage if they do not make contributions, and those below 100% of that level, should they stop making contributions, must make copays and receive fewer benefits until they contribute to their accounts again. The contribution amounts are reasonable and fair by income level. As we have found, low-income residents of our state make contributions consistently.

HIP also includes a work-referral element that offers enrollees the chance to gain new skills and learn about work opportunities so they can move out of the program. HIP is not intended to be a long-term entitlement program. It is a safety net that aligns incentives with human aspirations.

There is a legitimate argument as to whether governors under the Obama administration should hold out for complete repeal of Obamacare. But that still wouldn’t reform Medicaid and wouldn’t address the group of people not covered by Obamacare and not eligible for traditional Medicaid.

Governors who expanded Medicaid without negotiating reforms may have underestimated their bargaining power. However, governors like Pence who have dealt with an administration hostile to reform of a program in need of reform are moving the ball in the right direction — away from traditional Medicaid. He is setting up one of many potential plans that will be test cases for Medicaid alternatives if and when block granting or Medicaid waivers become widely available. (“Republicans have been talking for even more years about reforming Medicaid. That’s what we are doing in Indiana. If and when we elect a president and Congress willing to give Medicaid back to the states as a flexible block-grant, I’m confident that states will craft programs — like the Healthy Indiana Plan — that empower low-income Americans to take control of their own health-care choices and provide them access to quality care.”)

So, yes, the issue of Medicaid expansion is distinct from Obamacare. The former does not necessitate survival of the latter; Medicaid can be extended on its own terms. The key is determining what those terms will be. Would conservatives under the next two years prefer that Medicaid remain exactly as it is or that a bunch of reformed health-care plans for the poor spring up in states with innovative governors? The latter, I would argue, is much better for the working poor (especially if it includes a work requirement), for the GOP and for the cause of Medicaid reform.

UPDATE: Smart conservative blogger Noah Rothman writes, “Conservatives who would like to see the ACA torn out root and branch, Medicaid expansion included, will not be satisfied by Kasich’s decision to draw a distinction between the massive Affordable Care Act and the expansion of state-level entitlements. Apparently, Beltway media types were equally frustrated by Kasich’s phrasing. The distinction he raised, however, is a valid one to draw. Republicans who hope to advance repeal efforts after Barack Obama leaves office will one day have to contend with the fact that no governor – Democrat or Republican – is going to be willing to un-ring the Medicaid expansion bell.” Rothman also notes Kasich’s media blitz, which seems a tad too hyperbolic.