In America, being poor and uninsured can be a death sentence. The Patient
Protection and Affordable Care Act (PPACA), President Obama’s 2010 landmark
healthcare legislation, sought to right that wrong. The road to the legislation was long and
arduous, but the policy was signed into law much to the chagrin of Republicans
throughout the country. The original version of the Act would allow Americans aged 19
to 64 to enroll in health insurance and not allow the lack of coverage to be an impediment
to their lives or livelihoods.
As anticipated, the Act faced partisan attacks and its constitutionality was
challenged. In 2012, the Supreme Court upheld the constitutionality of the ACA, but they
gutted the Act of the vital mandatory Medicaid expansion clause determining it to be
unconstitutionally coercive of states. With the swipe of a pen, the Supreme Court’s
conservative led majority gave the power to the states to decide whether or not they
would expand Medicaid and offer protection and coverage to their most vulnerable
constituents.
Many Republican led states elected not to expand or to develop Medicaid
“reform” schemes to allow leadership to save face politically yet still provide services to
their constituency. Indiana fell into the latter group and Governor Pence worked closely
with aligned partners to develop HIP 2.0 which is marketed as Medicaid “reform” and
not expansion under the ACA. Governor Pence continues to control the messaging and
perception of the expansion as well as the healthcare destiny of Hoosiers.
However, the intellectual dishonesty of the waiver program has been called out by
liberals and conservatives alike. In this paper I will discuss the positive and negative
impacts the hubris of Governor Pence has had on Hoosiers and make the case for why
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traditional Medicaid expansion would have been a better alternative both physically and
fiscally for Indiana.
Partisan Plot
January 20, 2009 is a day that will live forever in history. This is the day the first
African American President of the United States of America, Barack Hussein Obama,
was inaugurated. This was a momentous occasion, but also the day the fate of the country
was laid at the feet of the Republican minority. Instead of embracing the new leadership
and attending events to celebrate this historical event, Republicans instead met in a
backroom of a Washington D.C. steakhouse to plot their return to power. All of the top
power brokers in the Grand Old Party (GOP) were present. In his book, “Do Not Ask
What Good We Do: Inside the U.S. House of Representatives,” Robert Draper describes
the meeting and its intent in detail. There were approximately fifteen people present,
inclusive of former Speakers of the House, Newt Gingrich and Eric Cantor and current
Speaker of the House, Paul Ryan. Pete Sessions (TX), Jeb Hensarling (TX), Pete
Hoekstra (MI), Kevin McCarthy (CA), Jim DeMint (SC), Jon Kyle (AZ), Tom Coburn
(OK), John Ensign (NV) and Bob Corker (TN) were also in attendance. The dinner
lasted for almost four hours and at the end of the dinner a plan had been devised to make
Obama a one term president and to return the Republicans to power. Draper quotes
Representative McCarthy (CA) as saying, “If you act like you’re the minority, you’re
going to stay in the minority. We’ve gotta challenge them on every single bill and
challenge them on every single campaign” (Draper, 2012). The mood of the group when
they left was not defeated as it was when they arrived, but instead they were “giddy”.
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Following that fateful night, the Republicans in the House and Senate put their
plan into action. History reveals that they were able to take over majorities in the House
and the Senate over the next 6 years, but were unable to take over the presidency. During
this time, the 112th and 113th Congresses earned the dubious title as the least productive
Congresses in history. While all legislation faced opposition during this time, there was
none that faced or continues to face as much obstruction as the President’s signature
health care law, the Patient Protection and Affordable Care Act (PPACA). The
Republicans plan to obstruct President Obama and the Democratic majority’s vision for
the future was evident almost immediately. As such, President Obama and Democrats
quickly came to realize that if they wanted to get anything of any significance passed
during his first term, they would have to move quickly and decisively while they
maintained the majority in the House and Senate.
The Fight for Healthcare Reform
The issue of healthcare reform was one of President Obama’s top domestic
priorities. He knew this would be a tough battle and learned from the mistakes of his
predecessors.
“Rather than having the executive craft the bill that would ultimately be
introduced in Congress, as had been done in President Clinton’s failed effort more
than fifteen years earlier, President Obama laid out the broad principles and goals
that he wanted in a health care bill and left it to the House and Senate to provide
the legislative details. Both chambers began working on healthcare in the early
months of 2009, with the House taking the lead” (Cannan, 2012).
The bill went through many modifications and in all fairness not only faced opposition by
Republicans, but also fiscally conservative “Blue Dog” Democrats who feared the cost
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would be too much. The Senate was hard at work on their bill as well and by September
2009, legislation had been drafted by the House and Senate based on ideas that were
cobbled together from past proposals that had been floated by Republican leadership and
a multitude of drafts that had circulated various legislative committees. None of the ideas
in the proposed legislation were new, in fact, the primary model that was utilized to draft
the PPACA was Massachusetts health care program MassHealth. However, even though
the bulk of the ideas were once publically held as good ideas in the past by Republicans
and the legislation was modeled after a healthcare program from a Republican Governor,
Mitt Romney, Republicans still refused to get behind the legislation.
In addition to the multitude of committee meetings in both houses of Congress,
President Obama also personally led joint meetings with Republicans and Democrats to
elicit insight, feedback and gain common ground all to no avail. The GOP had no plan to
reform healthcare, nor did they care. Their primary concern was blocking the legislation
as per their plan that was devised that fateful evening on January 20, 2009. The lows the
minority party in Congress would stoop to in order to block the legislation were
especially on display the evening of September 9, 2009 when President Obama addressed
a joint session of Congress and the American people about the proposed healthcare
legislation.
As President Obama stood at the podium in our most sacred vestige of
democracy, he was called a liar. Joe Wilson, Representative for South Carolina
interrupted the address and called President Obama, not once, but twice, a liar. The
outburst occurred when President Obama stated, “There are also those who claim that our
reform effort will insure illegal immigrants. This, too, is false-the reforms I’m proposing
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would not apply to those who are here illegally” (Obama, 2009). Never in recent history
had such a breach in protocol and decorum been witnessed. The event received national
and international coverage and reproach from both sides of the aisle. President Obama’s
challenger in the 2008 election, John McCain (R-AZ) stated of Wilson’s outburst, “No
place for it in that setting or any other and he should apologize immediately”
(McClatchy, 2009). As evidenced by Mr. Wilson’s half-hearted apology, the obstruction
cloaked in a chorus of “no”, and the utter contempt and disregard for the President and
his policies was on full view for Americans to see.
One would think the American public could see through the partisanship of the
fight but Republicans were deft at painting the legislation as a Federal takeover of
healthcare that would rob people of choice, tax them unnecessarily, cause shortages and
lest one forget subject our loved ones to death panels. The rhetoric was successful and
ironically the legislation suffered an almost insurmountable blow when Senator Ted
Kennedy (D-MA), a long time healthcare reform advocate, lost his battle with cancer and
a special election was held for his seat. In spite of a fiercely contested battle the
Republican candidate Scott Brown was elected.
This was the first time a Republican had held this seat since 1952. Because of this
development, the Senate did not have the necessary votes to resist a filibuster and the
healthcare legislation was literally on “life support”. A different tactic would have to be
taken to get the legislation passed.
“Democratic congressional leaders and White House officials met in what one
article described as a ‘substitute for a Congressional conference committee’ to
draft a proposal that could pass both houses. The negotiations were held behind
closed doors, which raised transparency concerns and meant that this important
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stage would leave no record aside from what was reported in the press” (Cannan,
2012).
Democratic Congressional leaders and the President had invested too much time,
effort and political clout to give up on healthcare reform so they turned away from
traditional voting practices and moved the legislation through a process known as
reconciliation. This was not a popular move and Republicans were outraged. However,
as Senator Judd Gregg (R) once said when Republicans were utilizing the tactic,
“Reconciliation is a rule of the Senate set up under the Budget Act. It has been
used before for purposes exactly like this on numerous occasions. The fact is, all
this rule of the Senate does is allow a majority of the Senate to take a position and
pass a piece of legislation, support that position. Is there something wrong with
majority rules? I don’t think so” (Cannan, 2012).
So that is exactly what Democratic Congressional leadership did. Through the
reconciliation process, two separate bills were sent to the President for his signature after
they had passed muster with their leadership.
On March 21, 2010 the Senate version of the health reform legislation passed the
House and from there the political games went to a whole new level of desperate
obstructionism. Republicans tried every single parliamentarian procedure they could
think of to stop the legislation and over the next four days it was touch and go as to
whether the law would pass. But eventually, the law did indeed pass after much back and
forth between the houses of Congress and multiple meetings including a last minute
clarification regarding abortion restriction to satisfy “Blue Dog” Democrats and get them
on the party line. “Finally, at 9:02 p.m. on March 25, the House voted to concur with the
Senate on House bill 4872, allowing it to be forwarded to the President, who would sign
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it into law” (Cannan, 2012). As expected, not a single Republican in Congress, inclusive
of Mike Pence who was representing the great state of Indiana in the House of
Representatives, voted for the passage of the bill.
The Need for Reform
The significance and necessity of what the ACA was trying to achieve had somehow
gotten lost in all of the partisan gamesmanship. Prior to passage of the ACA, it was
estimated there were forty-five million uninsured Americans living in the United States.
That means forty-five million Americans were living in the greatest nation of the world
and faced premature death because they did not have basic healthcare coverage.
Families USA conducted a study utilizing the Institute of Medicine’s methodology
to analyze state population and mortality data. Following the analysis, Families USA
published their findings in a manuscript entitled, “Dying for Coverage: The Deadly
Consequences of Being Uninsured”. The key findings of the research revealed, “Across
the nation, 26,100 people between the ages of 25 and 64 died prematurely due to a lack
of health coverage in 2010. That works out to: 2,175 people who died prematurely every
month, 502 people who died prematurely every week, 72 people who died prematurely
every day, or 3 people every hour” (Families USA, 2012). Of the 26,000 people who died
secondary to lack of coverage, 2,458 of them lived in Indiana. How could it ever be
acceptable for uninsured adults to have a 25% greater chance of dying prematurely than
someone who is insured? The goal of the ACA was to level the playing field so all
Americans would have the right to coverage, increase their ability to live healthy lives
and not be condemned to an early death because they are poor.
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Provisions of the PPACA
The “why” for the ACA is easy to understand intellectually but many were
unwilling to take the issue up because the “how” was so daunting. That is why it is
necessary to understand the key provisions of the ACA and how the legislation was
designed to tackle the problem of the uninsured from a multitude of perspectives.
It was evident there was no quick and easy fix, so a number of different options
were offered in the law to try and meet the needs of as many individual parties as
possible. When drafting the Act, Congress focused on,
“building on the system of employer-sponsored coverage by adding insurance
market reforms and the individual mandate, which requires most people to maintain
minimum essential coverage or pay a penalty beginning in 2014. The ACA also
establishes health insurance exchanges, which are new marketplaces that will be
operable in 2014, where people can purchase qualified health plans and gain access
to premium tax credits and cost-sharing subsidies. In addition, the ACA expands
access to affordable coverage through its expansion of eligibility for Medicaid
benefits” (Kaiser Family Foundation, 2012).
The legislation is split into two primary sections: access and coverage, Medicare
and Medicaid. The access and coverage provisions of the ACA clearly establish and
define the roles and expectations that each participant (the employer, the individual, and
the insurance company) plays to ensure that all involved have options that are mutually
beneficial. The American people have the ability to benefit largely from this as the law
prescribes that any citizen or legal residents are required to have “qualifying health
coverage.” And while individuals without coverage face a tax penalty, there are
exemptions granted to individuals in the lowest cost plan if the plan exceeds eight percent
(8%) of an individual’s income. This provision provides many Americans between 100%
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– 400% of the Federal Poverty Level (FPL) the opportunity to qualify for tax breaks
under the ACA. The provision also provides everyone else who does not fall into this
category the opportunity to obtain health coverage.
The legislation further recognizes that the need for health care reform was not
limited to individual responsibility. Reform was necessary to benefit employers as well.
President Obama stated in his aforementioned 2009 speech to the joint sessions of
Congress, “So many employers, especially small business, are forcing their employees to
pay more for insurance or are dropping their coverage entirely” (Obama, 2009). The
ACA includes provisions to help lift the cost burden from the employer by helping them
create affordable options for themselves and their employees. It provides small business
with a health insurance credit to help pay for coverage for employees with the help of
government funding. This gives employers the option to provide employees with
coverage without having to be financially strained. Although, “employers are not
required to provide health insurance coverage under the ACA, an automatic enrollment in
health insurance plans sponsored by large employers is mandated” (Editorial Staff
Publication, 2010). Additionally, the Act also provides employees with the option to opt
out of coverage if employers fail to offer minimum essential coverage. Most importantly,
the ACA provides employers who offer coverage free choice vouchers to employees with
incomes less than 400 percent of the federal poverty level which precludes employers
from having any penalties in the new state-based exchanges.
Health Benefit Exchanges
State-based American Health Benefit Exchanges were also developed to provide
individuals and small business a place to buy qualified coverage. Initially, there were
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only two kinds of exchanges a state could choose: a state-based exchange or federally-
based exchange. However, by 2011, “HHS added a state partnership exchange model as a
variation of the federally-run exchange. In a partnership exchange, enrollment is
conducted through Healthcare.gov, and the state uses the federal call center, but the state
can retain functions like outreach and education, as well as oversight of participating
plans” (Anderson, 2015). In 2013, two more exchanges were added to the ACA that
opened up more options for the states but also for small business.
The marketplace management exchange was one of the newly formed exchanges.
It is a federally run exchange but, “States utilizing this option are generally categorized
together with the states that have left the entire process to the federal government, but
they retain plan management functions, which includes certification of plans that are sold
in the exchange, as well as monitoring and regulatory control over the plans that are sold”
(Anderson, 2015). In addition to this, the Department of Health and Human Services
(HHS) also outlined provisions for states to operate as a bifurcated exchange, with the
state running the small business (SHOP) exchange, and the federal government running
the individual exchange.
The last exchange developed by the ACA to help with expansion was the
supported state-based exchange. This exchange was for “states that want to run their own
exchange but also rely on the economies of scale and technological success of
Healthcare.gov” (Anderson, 2015). This put the state in charge of their own exchange,
but enrollment was done through Healthcare.gov. When the law was initially signed,
opponents argued that the exchanges were not well explained and there were not enough
options that were appealing to the states. However, as illustrated above, the Federal
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government worked diligently and creatively to develop marketplaces that would enable
states to provide health care to their constituents without excuse. But as things stand
today, there are still a number of states holding out and refusing coverage to their
constituents regardless of the numerous options that have been developed.
Medicaid Expansion
In addition to the development of the exchanges, the ACA also sought to increase
coverage by expanding Medicaid eligibility requirements. The issue of Medicaid
expansion has been the most politically charged and controversial aspect of the Act.
However, expansion was necessary to bridge a gap in coverage for many poor and
working poor throughout the country. Medicaid has been in existence since 1965 and
traditionally required participating states to cover certain groups of people,
“…these mandatory coverage groups principally included pregnant women and
children under age 6 with family incomes at or below 133% of the federal poverty
level (FPL, $30,657 per year for a family of four in 2012), children ages 6 through
18 with family incomes at or below 100% FPL ($23,050 for a family of four in
2012), parents and caretaker relatives who meet the financial eligibility
requirements for the former AFDC (cash assistance) program, and elderly
people and people with disabilities who qualify for Supplemental Security Income
(SSI) benefits based on their low income and resources” (Kaiser Family
Foundation, 2012).
However, some states, including Indiana, offered Medicaid programs with even more
restrictive qualifications than what was prescribed under the law.
The ACA sought to right this wrong by requiring states to expand Medicaid to
offer coverage for non-disabled and non-pregnant adults without dependent children
provided they met the requisite financial requirements. These requirements included,
“nearly all people under the age of 65, who are not pregnant, not entitled to Medicare, not
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described in an existing mandatory coverage group, and who have incomes at or below
138% FPL” (Kaiser Family Foundation, 2012). In order to make this possible for states
and not impose additional financial constraints, the Federal Government would provide
100% of the state’s costs for Medicaid expansion from 2014 to 2016, and then gradually
decrease the amount of funding thereafter. The ACA would also require states to
“provide newly eligible Medicaid beneficiaries with a benchmark benefits package,
which must include the 10 categories of ‘essential health benefits’ specified elsewhere in
the ACA” (Kaiser Family Foundation, 2012).
As described previously, the ACA provided many avenues to coverage for
individuals, employers and states alike. An analysis of the ACA and the coverage
options offered under the law conducted by the non-partisan Congressional Budget
Office (CBO) estimated that expansion prescribed in the ACA would cover 17 million
uninsured low-income Americans by 2020. This would obviously go a long way in
helping to achieve the goal to decrease the uninsured population through the expansion of
access to affordable health insurance. If only it were that easy.
Act Passed, Battle Continues
The battle over the passage of the ACA healthcare reform legislation may have
been a win for Democrats and the uninsured population, but the war was far from over.
The law would face state court challenges, Supreme Court challenges, numerous votes in
the House and Senate and be used as a lightning rod for partisan support during down
ticket Republican elections as well as the Presidential race of 2012. The calls to repeal
“Obamacare” were loud and frequent, all the while there was an electorate who was
enjoying the benefits of new found coverage and the uninsured rate was driven down.
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However, even in spite of the ACA’s success the challenges still continue even to this
day.
Following the passage of the ACA, twenty-eight states immediately filed
challenges to the law based on the constitutionality of the Medicaid expansion provisions
as well as the individual mandate. The primary basis for the challenges was based on the
violation of state sovereignty and the claim that the law placed an undue financial burden
on state governments. Many cases wound their way through their respective lower courts
and rulings were entered declaring the individual mandate and Medicaid expansion
provisions of the law unconstitutional in two separate cases in Florida. The government
defendant in the cases did not seek en banc review in the 11th District Federal Court and
instead elected to petition the United States Supreme Court to review the constitutionality
of the individual mandate and Medicaid expansion on states. The primary focus of the
case, National Federation of Independent Business (NFIB) v. Sebelius, 132 S. Ct 2566,
and most of the media attention was based on issues surrounding the individual mandate.
The question of whether the mandate was a tax or a penalty was central to the case and
the viability of the Act. If the court determined that Congress could not impose such a
tax, it was the opinion of the plaintiff’s that the Act must be determined to be
unconstitutional.
On June 28, 2012, much to the displeasure of Republicans, the Supreme Court did
not rule the ACA unconstitutional. In a 5 to 4 vote the taxing power of Congress was
upheld and the ACA was rendered constitutional. To make matters worse, the final vote
and the majority opinion were leveled by Chief Justice Roberts, a Republican appointee
to the bench. But all was not lost to the GOP, because even though the law was not
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overturned, the Medicaid expansion clauses of the Act were determined to be coercive
and power was given to the States to make their own choice as to whether they would
expand Medicaid. In other words, expansion of Medicaid at the state level was deemed
optional.
As stated previously, the purpose of Medicaid expansion was to further decrease
the number of uninsured residents at or below 138 percent of the poverty level. If all
states would have expanded per the ACA it is projected that expansion would provide
21.3 million Americans with affordable health care by 2022 while reducing states’
uncompensated health care expenses. However, many states refused to expand based on
their purported concerns regarding cost. But that bluff has been called as states that have
expanded since the passage of the Act have few if any increased costs and their uninsured
rolls have decreased dramatically. So one must question the true reason why states have
refused. The issue regarding cost has been debunked so this would lead one to believe
that the true reason is stubbornness and political spite.
Currently there are a number of Republican led states that have not expanded
Medicaid much to the detriment of millions of their constituents and to their bottom line.
However, some Republican led states have seen the light and have agreed to “reform”
their Medicaid programs rather than forgo all funding that would be available under the
Medicaid expansion provisions of the ACA. One such state that chose to go the waiver
route is Indiana. While then Governor Daniels and the Republican led Statehouse were
not intent on embracing any provisions of “Obamacare” they were not completely willing
to let Hoosiers suffer because of this ideological battle. However, the struggle remained
on how to accomplish this without embracing the ACA.
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The Repeal Movement
At the time the ACA was drafted and signed into law by President Obama, Mike
Pence was a member of the Indiana Congressional Delegation. Mr. Pence served as a
Representative for Indiana and was on the forefront of all of the partisan battles being
fought over healthcare reform. Review of Representative Pence’s voting history on health
care legislation while in the House reveals that he voted per the party line. He voted
seven times, between 2009 and 2012, to either vote down the legislation that was brought
forth as the ACA or to repeal the law once it was in place. His views on the healthcare
law were very clear. He like most Republicans claimed the law represented a government
takeover of health care and robbed people of their right to choose and placed an undue
financial burden on already stressed federal and state budgets.
In fact, Representative Pence’s ire for the ACA was so strong that he was honored
by the Independent Women’s Voice President and CEO Heather Higgins for adding his
name to the Obamacare Repeal Pledge. In their thank you to Mr. Pence, Ms. Higgins
states,
“Congressman Pence has been a leading voice for the repeal of this harmful
government take-over of health care. He understands the harm it will do to our
medical system, how it will reduce individual choice and control and insert
government bureaucrats into private health care choices that should be left
between doctors and patients” (iwvoice.org).
Ms. Higgins further notes, that unlike other pledges, their pledge is, “different…as it
commits the signers to not only vote for repeal, but also to take all effective steps to
defund, deauthorize and ultimately repeal Obamacare.” However, Representative Pence
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would not remain in D.C. to continue his efforts to repeal the legislation, he instead
turned his sights back to Indiana.
The Indiana Dilemma: To Expand or not to Expand…that is the Question
In 2012, Mike Pence was elected as the 50th Governor for the State of Indiana.
Governor Pence did not have much time to rest on his laurels or bask in victory when he
took office in January of 2013. He was immediately faced with several pressing issues
for the state, not the least of which was what to do about the expansion of Medicaid. As a
Representative, Mr. Pence was a staunch adversary to the law and all it stood for. To
accept any funding or to embrace any facet of the law would be a complete 180 degree
turn from all he stood for. After all, he had voted numerous times to repeal Obamacare
and had taken a pledge to do all he could to stop the government take-over of healthcare.
How could he now embrace expansion and go against the party line and all he had stood
for?
The answer to that question is, how could he not? In a study published by
Families USA in April of 2013, entitled Indiana’s Economy Will Benefit from Expanding
Medicaid, a very strong case for expansion was made:
“The Medicaid expansion gives the leadership of every state the opportunity to
expand health coverage for their residents while taking advantage of generous
general funding that will support jobs and economic growth throughout the state.
If Indiana takes up the Medicaid expansion in 2014, in 2016, an estimated $1.3
billion would be spent on health care delivered in the state. The addition of that
money to the state’s economy would support approximately 16,400 new jobs and
increase economic activity in Indiana by more than $1.9 billion.” (Families USA,
2013)
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Not only would the state benefit financially, but more importantly the study also points
out that an additional 517,000 low-income Hoosiers could gain coverage through
expansion. This study was one of many that touted the benefits of expansion and debunks
the claims of increased costs. However, Pence and Republican leadership remained
steadfast in their commitment to not expand Medicaid under the ACA. They instead
turned their focus toward another potential avenue to gain additional coverage for
Hoosiers under a scheme to expand an already existing Medicaid waiver program, the
Healthy Indiana Plan (HIP).
HIP was already working to cover a number of underserved Hoosiers. However,
expansion of Medicaid under the ACA would increase the number of people eligible for
coverage and expand services beneficiaries received. But traditional expansion of the
ACA was not a politically palatable option. A mechanism to tap into the funding
available through expansion needed to be devised.
As a part of my research, I had the opportunity to sit down with Brian Tabor, the
Executive Vice President of Advocacy for the Indiana Hospital Association (IHA). Mr.
Tabor enlightened me about the process that led to the passage of Healthy Indiana Plan
2.0. With hospitals being on the forefront, IHA played a significant role in the quest to
expand coverage for Hoosiers. Mr. Tabor shared with me that the Healthy Indiana Plan
was already in existence, but it needed a lot of work. When the original plan was put in to
place it only covered the disabled, low income pregnant mothers and kids. Additionally,
Indiana had one of the most restrictive programs in the country in terms of Medicaid
coverage, Mr. Tabor said, “HIP 1.0 had limits on the annual amount that could be paid
towards a person’s healthcare, consisting of a million-dollar lifetime limit that only
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chronic conditions could run over, people who didn’t make payments could be dis-
enrolled, there was an enrollment cap and maternity benefits were not covered.” He
continued to say, “There were some low income beneficiaries that were covered but only
up to 24% of the poverty level.” As a result, HIP left tens of thousands of Hoosiers in a
coverage gap with no other avenues to pursue.
In addition to the restrictive qualifications, HIP was also under funded. The funds
utilized to bankroll the program were derived from an increased cigarette tax and there
simply was not enough money to cover more people. However, the passage of the ACA
provided the state with an opportunity to capitalize on government funding and expand
coverage for Hoosiers. With an upcoming gubernatorial election looming, the state
legislature acted quickly in order to ensure health care expansion in Indiana was an
option in the new administration.
Prior to the ruling in NFIB v. Sebelius, the Indiana legislature and Governor
Daniels scrambled to figure out a way to tap into the resources offered through expansion
without having to expand traditional Medicaid as prescribed in the ACA. The legislature
came to a collective agreement to give the governor’s office the power to handle the
expansion issue on their own without legislative approval. The reason they ceded their
power and authority to the governor was their belief that expansion of Medicaid was
impossible. In fact, many believed the ACA was doomed and going to be overturned and
declared unconstitutional. Detractors to the ACA firmly believed the Supreme Court
would dismantle the law and therefor there would be no need to address the expansion of
coverage under Medicaid. Many influential stakeholders in the state legislature opposed
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the idea of expansion inclusive of Senator Long who was quoted as saying, “Over my
dead body,” when discussing plans for expansion of Medicaid in Indiana.
Because the legislature forfeited their right to vote on the issue of expansion, it
was up to the governor to do what he felt was best for Hoosiers. Governor Daniels put
the wheels in motion to utilize HIP as a conduit to a waiver program prior to his leaving
office. However, how his successor, Mike Pence would deal with the issue was still an
unknown. With his conservative ideals and his hatred toward the ACA many wondered
how this feat was going to be achieved. After the ruling in NFIB came down from the
Supreme Court, Pence’s will to deny all things Obamacare was tested. To the
legislature’s surprise and dismay, Governor Pence began negotiations with the Obama
Administration and HHS to expand HIP through a waiver program as preordained by his
predecessor, Governor Daniels.
Through the persistence of many invested state associations, the need for
expansion/reform was illustrated and driven home to the governor. He began moving
quickly to make the waiver program a reality for Hoosiers. As the idea of expansion
became a reality, detractors on both sides of the state legislature began regretting their
decision to opt out of the discussion. Many of them wished they had a say in what was
going down, but it was too late, the die had already been cast.
Waiver Program
Democrats and Republicans alike are not fans of waiver programs such as HIP
2.0. While many praised the granting of the demonstration waiver for HIP 2.0 there were
still many detractors to the law. Notably, Indiana House Democratic Floor Leader Linda
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Lawson of Hammond, Indiana was unsupportive of the program. In a statement dated
June 16, 2014, Ms. Lawson voiced her disappointment. She stated,
“In my mind, our state is making a huge mistake by addressing this problem
through a framework that I feel is simply incapable of meeting the health care
needs of so many people. Furthermore, by continuing to stubbornly reject the
benefits offered through acceptance of the federal Affordable Care Act, our state
is tossing away millions in taxpayer dollars, thousands of new jobs, and denying
the kind of comprehensive coverage that truly can make Hoosiers healthy.”
(Lawson, 2014)
Ms. Lawson additionally made several points about how other states are
expanding Medicaid through the ACA and seeing no increase to their bottom line,
gaining new jobs and decreasing the number of uninsured in their states. She claims the
more responsible thing to do would have been to follow this path and expand under the
provisions of the ACA. “But acceptance of that plan would be admitting that the
President of these United States had the right solution to answer our health care woes.
Such admissions are not politically acceptable” (Lawson, 2014).
Ms. Lawson’s rebuke and distaste for the waiver program was not the only one
expressed in June of 2014. In fact, Jonathan Ingram, the Director of Research for Forbes
Magazine, wrote a memo to Indiana legislators and conservative health policy leaders
regarding debunking Governor Mike Pence’s Medicaid expansion promises. The memo
dated June 11, 2014 is a rebuttal to Governor Pence’s response to an article that was
published in Forbes calling Governor Pence out for embracing Obamacare expansion
through the auspices of HIP 2.0. The memo states, “it’s clear the governor’s staff is
tasked with creating a smokescreen of buzzwords to disguise this Obamacare expansion
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rather than addressing the serious policy failures that we and others have highlighted”
(Ingram, 2014). The primary concern that is raised is that HIP 2.0 creates a new
entitlement. However, the most telling of all arguments in the memo, was saved to the
last,
“Gov. Pence’s staff ended their pleas for our silence with the claim that Pence
continued to support the full repeal of Obamacare. But actions speak louder than
words. Gov. Pence’s decision to implement key provisions of Obamacare after the
Supreme Court ruled that Indiana was under no obligation to do so undermines
his alleged commitment to repeal. After all, there’s a reason progressives are
celebrating Gov. Pence’s decision to expand Medicaid. Trust me, it’s not because
the folks at MSNBC are impressed with such a ‘conservative reform plan”
(Ingram, 2014).
It is obvious that HIP 2.0 is neither true expansion nor reform as it does not meet
the qualifications of either. But that begs a question as to what should Republican
leadership do when faced with a choice to expand? Do you not accept the money? Do
you essentially agree to let thousands of your constituency die early deaths because you
do not want to make an unfavorable political decision or do you compromise? That is
where the true debate regarding expansion and reform lies. As an advocate, you
sometimes have to take what you can get. Which is why many Democrats have gotten on
board with waiver schemes versus true expansion. After all, something is better than
nothing, right? Mathematically that is correct, unless you happen to be in the group of
people who fall into the coverage gap, or who cannot afford to make their premium
payments, etc. All Pence did with HIP 2.0 is compromise his conservative principles and
the healthcare of thousands of Hoosiers.
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HIP 2.0
On January 27, 2015 Governor Pence successfully expanded HIP to HIP 2.0
through a demonstration waiver program granted by HHS. HIP 2.0 enabled Indiana to
receive funding from the Federal Government to expand coverage to Hoosiers without
having to expand Medicaid in the traditional manner as prescribed by the ACA. The
program built on the already existing Healthy Indiana Plan and,” adds new pathways for
coverage that promote employer-sponsored coverage and continue HIP’s private market
consumer-directed model with incentives for members to take personal responsibility for
their health” (www.in.gov). According to the state, HIP 2.0 is working to:
Replace traditional Medicaid in Indiana for all non-disabled adults
Provide new coverage choices for Hoosiers
Promote employer-sponsored coverage and family coverage options
Improve the health status of Hoosiers
Provide health coverage to low-income Hoosiers and ensure an adequate
network for both HIP and Medicaid enrollees
Empower participants to make cost- and quality-conscious health care
decisions
Create pathways to jobs that promote independence from public assistance
Ensure that the HIP expansion is fiscally sustainable
The program also covers, “Indiana residents between the ages of 19 and 64 who’s family
incomes are less than approximately 138 percent of the federal poverty level (FPL) and
who are not eligible for Medicare or another Medicaid category” (www.in.gov). This
means that HIP 2.0 will provide a coverage option for an estimated 334,000 to 598,334
Hoosiers who have incomes under 138 percent FPL.
22
While HIP 2.0 has created new opportunities for coverage, there continues to be a
number of significant problems with the program. The state of Indiana touts the need for
“consumer responsibility,” and Republicans have a long history of success with this
concept. What consumer responsibility entails is some level of personal and financial
responsibility in order to gain coverage. For example, as opposed to the insurance
company or government agency such as Medicaid dealing with all of the bills and
expenses, HIP 2.0 places the responsibility in Hoosier’s hands.
The agreement of CMS to approve the HIP 2.0 demonstration waiver was a win
for Hoosiers and a significant number of vulnerable constituents as many were now able
to gain access to coverage that was not before available. However, the consumer
responsibility aspects of the plan could be a deterrent as many people do not have a
strong knowledge base about how insurance works. As a result, much like the original
Healthy Indiana Plan, the consumer responsibility model could act to the detriment of
beneficiaries’ health and health care.
Expansion Under the ACA
However, traditional expansion of Medicaid under the auspices of the ACA would
have been a better option for Hoosiers. There are a number of issues with HIP 2.0 that
place Hoosiers at risk for either not gaining or losing coverage. CMS made a major
concession allowing Indiana to lock residents out of coverage for six months if they
missed a premium payment. In addition to the non-payment dis-enrollment issue, HIP
2.0 is very complex and may produce higher administrative costs. Families USA notes in
an analysis of Indiana’s Medicaid Expansion Waiver: Arguments to Counter
Problematic Elements by Dee Mahan in February of 2015 that, “multiple benefit levels,
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individual accounts, and income-based penalties for nonpayment of premiums. Those are
just some of the variables that the state must administer and track” (Mahan, 2015).
Medicaid on the other hand, would require no additional administrative costs or
bureaucracy on behalf of the state and therefor would be more efficient and less costly to
manage. Another issue with HIP 2.0 versus traditional expansion involves the actual cost
of healthcare to participants. “Indiana’s program includes provisions that can cause
beneficiaries to delay coverage, that disrupt their coverage, or that deter people from
signing up in the first place” (Mahan, 2015). Ms. Mahan states that provisions that deter
beneficiaries include premiums (which are not a feature of a traditional Medicaid
program), penalties and lock-outs for non-payment, waiting periods and no retroactive
eligibility. All of these deterrents not only impact the beneficiaries, they also impact
businesses and the state alike. If beneficiaries cannot get the care and coverage they
need, emergency rooms will continue to be taxed, uncompensated care will increase and
a “less healthy and less productive workforce” will exist.
Impact of Repeal of ACA on HIP 2.0
However, the biggest threat to HIP 2.0 and why traditional expansion would be a
better option rests in the funding of the program itself. If the program is not funded,
coverage will not be available to any beneficiaries. The fact remains, as much as
Governor Pence would like to disagree or disavow, that the bulk of the monies to fund
HIP 2.0 truly do come from the Federal Government through the expansion funds
generated by the ACA. However, when you research the issue, the current funding for the
plan is glossed over and picks up in 2017 when federal dollars begin to diminish.
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However, an overview of HIP 2.0 financing done by Democrat Pete Visclosky pulls the
curtain back on the issue and notes the following:
“The State and the Indiana Hospital Association (IHA) have reached a mutually
beneficial agreement regarding the use of the HAF to fund a HIP expansion.
Hospitals through the HAF would begin making contributions in 2017, when the
federal government requires a State contribution for health related costs for HIP
expansion… The terms of the State’s waiver request rely on the availability of the
enhanced federal matching rate and the continuation of the State’s provider
assessment on hospital. If either funding source is reduced or eliminated
at any point during the five-year waiver period, the HIP 2.0 program will
automatically terminate for the new expansion population.” (Visclosky, 2014)
So that begs one to question, what happens to HIP 2.0 if the ACA is repealed?
As Governor Pence dodged arrows from all sides, he has continued to beat the
political drum and remains steadfast on the issue of repeal of the ACA. In June of 2015,
the Supreme Court entered a ruling in King v. Burwell, “6-3 that income-based insurance
subsidies are valid in states like Indiana that deferred to the federal government to run
their health exchanges” (Groppe, 2015). The ruling paved the way for more than 180,000
Hoosiers to purchase insurance through the HealthCare.gov exchange and to continue to
receive the subsidies. Governor Pence was asked his reaction to the ruling wherein he
called the decision,
” profoundly disappointing to me and every Hoosier who had hoped this ruling
would give our nation the opportunity to start over on health care reform.
Today’s display of judicial activism by the Supreme Court upholds this deeply
flawed law to the detriment of millions of Hoosiers who will continue to be
subject to the mandates and taxes in Obamacare.” (Groppe, 2015).
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Supreme Court challenges are not the only challenges the ACA continues to face.
Republican majorities are held in Congress and per their election year promise, votes to
repeal Obamacare have been taken up and passed in both chambers. The Senate bill was
passed on December 3, 2015 and was sent to the President for signing. While the vote
was primarily ceremonial, as the bill was quickly vetoed by the President, it demonstrates
the continued fortitude of Republican leadership to do any and all it can to block the
President’s signature healthcare law. And Pence, to the detriment of Hoosiers, is right in
step with rank and file Republicans.
However, the conundrum Pence has found himself in was aptly described in a
story published in the Indianapolis Business Journal on December 4, 2015. The article,
“All of a Sudden, HIP 2.0 has a Cloudy Future” highlights Pence’s continued
intransigence to all things Obamacare and how this position could potentially backfire on
his own signature health care law, HIP 2.0 and more importantly on Hoosiers who are in
desperate need of coverage. The article notes the governor’s 18-month long negotiation
with the Federal Government to utilize Medicaid expansion monies to fund HIP 2.0
which seemed like a win-win for all involved…until you read the fine print. A
“Conservative Cloud” has fallen on the law as the necessary votes to repeal are now
available in Congress and “the Indiana Democratic Party jumped on that turn of events…
sending out an email that said funding for HIP 2.0 was in jeopardy because of the GOP
drive in Washington, D.C. to repeal Obamacare” (Wall, 2015). The press release by the
Indiana Democratic Party calls out Governor Pence on the hypocrisy of his stance to
repeal Obamacare. The release states,
“The Pence Administration was ‘willing to sell a bridge’ and said it was an
‘unlikely scenario’ that the federal government would end programs like the
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Healthy Indiana Plan 2.0 with the repeal of the Affordable Care Act. But as it
turns out, the U.S. Senate today could do just that by voting to repeal parts of the
ACA, including state Medicaid Expansion programs” (Anderson & Pence, 2015).
It is further noted by Drew Anderson, Communications Director for the Indiana
Democratic Party,
” Either Mike Pence’s top spokesperson was being intellectually dishonest with
the media or he simply doesn’t understand the policy of the Affordable Care Act
and how it fully pays for HIP 2.0 and the healthcare of over 550,000 Hoosiers.
But what we do know is Mike Pence built his career on his ideological opposition
to the ACA. Mike Pence still calls for its full repeal, and he won’t be honest by
admitting that this repeal will cut the health care for Hoosiers who rely on this
coverage” (Anderson & Pence, 2015).
So why does Governor Pence, maintain a stance that is blatantly false and counter-
productive to his signature health care law?
The Hubris
One can only assume it is hubris. Hubris is defined by Merriam-Webster as, “a
great or foolish amount of pride or confidence” (Merriam-Webster, 2015). Governor
Pence’s hubris was on full display in a statement put forth by his office addressing HIP
2.0: Myth vs. Facts. In the statement, Governor Pence doubles down on his claims he is
not expanding Medicaid. He states his continued support for the full repeal of
Obamacare and to block the granting of expansion of Medicaid and further stating, “he
has refused to expand the traditional Medicaid program.” That last statement is the only
true statement in the release, but even that statement is misleading. While Indiana did not
expand the “traditional Medicaid program”, Indiana did accept the funding available from
the Medicaid expansion provision of the ACA and that is the primary funding source for
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HIP 2.0 by which HIP 2.0 would not otherwise exist. The cigarette tax and the Hospital
Assessment Fees only account for a small amount of funding for the program. Without
the dollars available under the ACA, HIP2.0 would not exist, plain and simple. In light
of these facts, one can only question why Governor Pence believes he can pull the wool
over the eyes of Hoosiers. He either believes they are ignorant or he has so much pride
and confidence in his ability to make them believe something that is not true. Either way,
he has sold Hoosiers a healthcare program that is more like a Ponzi scheme than a safety
net.
Conclusion
The passage of the Patient Protection and Affordable Care Act (PPACA) was
fraught with battles and challenges. However, for the time being, the Act remains the law
of the land even though the challenges remain as do the votes and calls for repeal. But
the success of the Act speaks for itself. Millions of Americans lead healthier lives as
more people are covered by insurance and can gain access to much needed care
irrespective of their socio-economic level. By virtue of the many options available to gain
coverage under the Act, either through exchanges or expansion of services, America has
decreased the uninsured population exponentially. However, much work remains to be
done and the politics of healthcare need to be overcome.
The health and well-being of the constituency must take precedence over political
power and prowess. Unfortunately for states like Indiana, under the current Governorship
of Mike Pence, that is not possible. Ironically however, Governor Pence has been quoted
as saying, “We also know that the true measure of a society is how it treats its most
vulnerable.” Yet while he expanded coverage to Hoosiers through the waiver program
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HIP 2.0, he has continued to pursue repeal and protests the very law that enables its
existence. Granted, HIP 2.0 is a better option than no expansion of coverage and services
at all, but it is deficient in providing benefits and security that would be afforded to
Hoosiers if traditional expansion of Medicaid under the ACA had been accepted. The
dichotomy of the issue and the consequence on Hoosiers cannot be lost or ignored no
matter how much Governor Pence tries to convince everyone to the contrary. Waiver
programs are a form of Medicaid expansion, they just are not as safe, effective, cost
efficient and inclusive as expansion would have been.
29
Works Cited
Anderson, Jeffrey H. "An Alternative to Obamacare - by Jeffrey H. Anderson." Hudson
Institute. N.p., 11 Dec. 2015. Web. 21 Feb. 2016.
Cannan, John. "A Legislative History of the Affordable Care Act: How Legislative
Procedure Shapes Legislative History*." Law Library Journal 105.2 (2013): 132-
73. Print.
Draper, Robert. Do Not Ask What Good We Do: Inside the U.S. House of
Representatives. New York: Free, 2012. Print.
"Dying for Coverage: The Deadly Consequences of Being Uninsured." Families USA.
Families USA, June 2012. Web. 23 Mar. 2016.
Editorial Staff Publication. CCH's Law, Explanation and Analysis of the Patient
Protection and Affordable Care Act: Including Reconciliation Act Impact. Vol. 1.
Chicago, IL: Wolters Kluwer Law & Business, 2010. Print.
Gates, Alexandra, Robin Rudowitz, and Samantha Artiga. "Healthy Indiana Plan and the
Affordable Care Act." Kaiser Family Foundation (KFF). The Henry J. Kaiser
Family Foundation, 18 Dec. 2013. Web. 1 Feb. 2016.
Groppe, Maureen. "Supreme Court Upholds Obamacare Subsidies in Indiana."
Indianapolis Star. USA Today Network, 25 June 2015. Web. 10 Mar. 2016.
"Hubris." Merriam-Webster. Merriam-Webster, n.d. Web. 23 Mar. 2016.
"Indiana's Economy Will Benefit from Expanding Medicaid." (n.d.): n. pag. Families
USA. Families USA, Apr. 2013. Web. Feb. 2016.
Ingram, Johnathan. "Debunking Governor Mike Pence’s Medicaid Expansion Promises."
Uncover Obamacare. N.p., 11 June 2014. Web. 10 Mar. 2016.
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"IWV Thanks Rep. Mike Pence for Signing the ObamaCare Repeal Pledge." IWV.
Independent Women's Voice, n.d. Web. 3 Mar. 2016.
Lawson, Linda. "Indiana Is in Urgent Need of a HIP 2.0 Replacement." Indiana House
Democratic Caucus. N.p., 16 June 2014. Web. 24 Mar. 2016.
Mahan, Dee. "Indiana's Medicaid Expansion Waiver: Arguments to Counter Problematic
Elements." Families USA. Families USA, Feb. 2015. Web. 3 Mar. 2016.
Obama, Barack. "Obama Offers Health Care Details in Speech to Congress." CNN. Cable
News Network, 9 Sept. 2009. Web. 12 Feb. 2016.
Rosen, James. "Instant Fame for South Carolina GOP Congressman Who Heckled
Obama." McClatchyDC. N.p., 9 Sept. 2009. Web. 18 Feb. 2016.
Visclosky. "HIP 2.0 Myth vs. Facts." FSSA. Indiana Government, May 2014. Web. 23
Mar. 2016.
Wall, J.K. "All of a Sudden, HIP 2.0 Has a Cloudy Future." IBJ. IBJ, 4 Dec. 2015. Web.
3 Mar. 2016.
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