Indiana Gov. Mike Pence announces GOP-friendly twist on Medicaid expansion

Indiana Gov. Mike Pence unveiled a plan Thursday to extend health coverage to about 350,000 lower-income residents, a play on Obamacare’s Medicaid expansion that should be more palatable to conservatives.

Mr. Pence is among Republican governors who are trying to thread the needle by leveraging new federal dollars for people who make less than 138 percent of poverty, but without expanding traditional Medicaid as President Obama’s health care prescribes.

The governor’s office said the strategy, known as Healthy Indiana Plan 2.0, rewards people for moving off public assistance and into employment, strengthens Health Savings Accounts and puts people in a benefit structure similar to commercial health plans.

Enrollees who contribute to their savings account, or “POWER account,” will be rewarded with access to dental and vision care.

“Reforming traditional Medicaid is essential to creating better health outcomes and curbing the dramatic growth in Medicaid spending,” Mr. Pence said. “HIP 2.0 takes consumer-driven Medicaid reform to the next level by replacing traditional Medicaid for many in Indiana with a plan that empowers participants to take charge of their health and to be cost-conscious consumers.”

The expansion of the Health Indiana Plan is paid for by the state’s cigarette-tax revenue, its Hospital Assessment Fee and new federal Medicaid funding.

Although his office’s press release doesn’t say it, the move is a spin on Obamacare’s Medicaid expansion, and it will need a federal waiver to access the funding available through the law.

The governor’s office says the plan will “alleviate the coverage gap created by the Affordable Care Act.” However, the gap only exists when governors refuse to follow what Obamacare urges — expanding Medicaid to make sure people can qualify for either the government health program or subsidies on the health care law’s exchanges.

Several states have found a way to expand coverage to its poorer residents without violating the GOP’s opposition to Obamacare. Arkansas led the way, leveraging federal payment for the expanded population to buy them private insurance on its new health exchange, and Iowa followed suit.

Other states are forging their own plans.

“The Healthy Indiana Plan is an example of how the Hoosier state has been leading the way with innovative ideas and state-based solutions,” Sen. Dan Coats, Indiana Republican, said. “I commend Governor Pence and his administration for their commitment to maintaining a consumer-driven approach that empowers participants and provides access to quality health care. “