News From Terre Haute, Indiana

April 1, 2013

House committee pushes Pence to negotiate Medicaid expansion

By Maureen Hayden
CNHI Statehouse Bureau

INDIANAPOLIS — Indiana Gov. Mike Pence has insisted he won’t expand what he calls the “broken” Medicaid health insurance program for the poor, but some state legislators are encouraging him to do so, even it’s called by another name.

On Monday, the House Public Health Committee passed legislation that mandates Pence negotiate with the federal government to find a way to use expanded Medicaid funds to provide healthcare coverage for more than 400,000 uninsured Hoosiers.

The 8-5 bipartisan vote on Senate Bill 551 supports a plan put forth by Pence that exclusively ties Medicaid expansion under the federal Affordable Care Act to the state’s Healthy Indiana Plan.  

But it also nudges Pence to go further if the federal government rejects his proposal – a nudge that the Pence administration questioned as valid at a hearing last week.

“We want the (Pence) administration to make a good-faith effort, it’s best effort, to create an option to cover these uninsured Hoosiers,” said state Rep. Ed Clere, a New Albany Republican who chairs the House Public Health Committee.

Senate Bill 551, as passed by the Senate, contained language that suggested Pence negotiate with the federal government about how to implement a provision in the Affordable Care Act that calls for states to expand the traditional Medicaid program to cover the working poor.

The House committee beefed up that language and also gave the state an out: If the federal government doesn’t come through with the billions of dollars promised to the state to expand Medicaid – as Pence fears -- the state could pull back from the expansion.

Pence has insisted he won’t expand Medicaid coverage as called for under the ACA. But he has asked the federal government to give Indiana millions of more Medicaid dollars to expand the state’s current program for the uninsured, known as the Healthy Indiana Plan.

The state plan, known as HIP, currently covers about 40,000 Hoosiers who aren’t eligible for Medicaid but who can’t afford to buy private health insurance. HIP contains co-pays, high deductibles, spending limits, and other restrictions that don’t jibe with the federal Medicaid program.

That’s why some legislators fear the federal government won’t approve HIP as a substitute for expanding the traditional Medicaid program. And they fear Indiana will lose out on more than $10.5 billion in federal Medicaid dollars over the next six years that could be used to cover Indiana’s uninsured.

But Clere expressed some cautious optimism for Pence’s plan. He noted the Arkansas has received tentative approval from the federal government to use federal Medicaid expansion dollars to subsidize the purchase of private health insurance for low-income residents who would qualify for coverage under the Affordable Care Act. Ohio is also in negotiations to do something similar.

Clere said that indicates the federal government is more flexible than it appeared to be just a few months ago. Clere said he wants to encourage Pence to take advantage of that flexibility.

“I have to believe that Gov. Pence would like to find a way to give hard-working Hoosiers, who can’t afford health insurance, access to affordable health care,” Clere said.

What Senate Bill 551 means, if anything, is unclear. At a recent hearing on the bill, Debra Minott, the Pence-appointed head of the Family and Social Services Administration, said the governor believes state law already allows FSSA to negotiate with the federal government on the Affordable Care Act and that nothing more is needed from the General Assembly.

Clere responded with polite disagreement: “This is a major policy decision. And I’ll be disappointed if the legislature decides not to weigh in with substantive and meaningful legislation.”

The original Affordable Care Act required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, about $32,500 annually for a family of four. A Supreme Court decision last summer made the expansion optional for states but kept in place financial incentives. The federal government has agreed fully fund the expansion for the first three years, with the states’ share gradually increasing to 10 percent by 2020.

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.