Indiana Gov. Mike Pence achieved a bureaucratic goal Tuesday when the Obama administration signed off on a one-year extension of a federal waiver for the Healthy Indiana Plan.
He immediately declared it a "victory for Hoosiers enrolled in this innovative program and will ensure that Indiana remains at the forefront of consumer-driven health care in the United States.”
But is this a victory for Hoosiers?
First, let's do some math.
This is a state of 6.5 million people. In an interview with Pence last Tuesday, he put the uninsured population at 880,000. In the state's biennial budget passed last April, it provided funding for an additional 90,000 Hoosiers to be covered under the pre-Obamacare Medicaid system. At the insistence of Senate Appropriations Chairman Luke Kenley, R-Noblesville, about $400 million was placed in the budget to cover a full extension of Medicaid under President Barack Obama's Affordable Care Act.
"We think 500,000 will be eligible for participation in the premium tax credits for the health care exchanges," Pence told me. The current Healthy Indiana Plan covers 36,600, and there are 55,000 people on the waiting list. As part of the federal waiver through 2014, HIP enrollment will expand by 15,000 people. "We’ll be just shy of 50,000," the governor said.
That puts the pool of uninsured around 300,000.
The governor wants to use the Healthy Indiana Plan as the vehicle for Obamacare era Medicaid expansion. "In terms of the where to go from here, we just cleared our first prerequisite," Pence said. "My other two prerequisites in Medicaid expansion are: It has to preserve elements of the consumer-driven model of the Healthy Indiana Plan, and it has to be fiscally responsible and sustainable."
Under Obamacare, 100 percent of the Medicaid expansion will be covered for the first three years, and then 90 percent in perpetuity. "That 10 percent we would have to pick up in the long term is a very significant expense for the state of Indiana," the governor said.
Thus, Pence is calling for a "modest" expansion of Medicaid under the Healthy Indiana Plan. And if the feds reject HIP for expansion, Pence is prepared to walk away.
This is a values element every taxpayer, every lawmaker and our governor needs to carefully consider.
Asked what his message is to the insured citizens who essentially subsidize the 300,000 uninsured, Pence talked about a "broad range of services" to the uninsured, citing hospital charity care, the Disproportion Share Hospitals like Wishard in Indianapolis and Parkview in Fort Wayne, and community health centers. "Health care is available to most Hoosiers," Pence said at Tuesday's press conference. "Every person has the ability to walk into an emergency room."
Pence acknowledged many community health professionals and local hospitals are concerned about what would happen if the federal government does not approve HIP for a full Medicaid expansion. Health care industry sources tell me the Healthy Indiana Plan is not designed for a full expansion and would likely be dramatically changed by the federal government. "It's an honest disagreement," Pence said.
Citizens in Elkhart heard it last Wednesday night when Elkhart General Hospital President Greg Losasso said his community would be “disadvantaged” without the federal funds that would come with a Medicaid expansion. In the first three years under Obamacare, the number Pence is prepared to leave on the table is $10.45 billion (Indiana's biennial budget is $15 billion). Potential cost to the state between 2014 and 2020 range from $600 million to cover those “out of the woodwork” – current Hoosiers eligible for Medicaid coverage – and up to $2 billion to cover 300,000.
My colleague from Community Newspapers, reporter Maureen Hayden, has written a column that adds some stunning perspective to the stakes here. She reported 2.7 million Hoosiers sought care in hospital emergency rooms last year. Thirty Indiana counties have no obstetric services. Because of this lack of pre- and post-natal care, Indiana's infant mortality rate is a stunning 7.7 per 1,000 babies, a full percentage above the national average. Of 35 "critical access" hospitals in rural Indiana, 11 of them are losing money.
According to a 2011 study by the Indiana Hospital Association, Indiana’s hospitals “ate” about $3 billion delivering uncompensated care to people who couldn’t pay their hospital bills (those with coverage pay for that). About $1.7 billion of that was the “charity care” that, by Indiana law, nonprofit hospitals are required to deliver. Hayden described as "tattered" the Indiana social safety net Pence wants to rely on if Medicaid isn't expanded.
When I asked Pence about weighing these factors, he responded, "For Indiana, our fiscal integrity is the foundation of our prosperity."
Add on top of this the state's high obesity and smoking rates, the thousand meth labs police have busted so far this year (involving 300 kids), and that 13.5 percent of our households are "food insecure" according to the U.S. Department of Agriculture, and the picture we see isn't that of the "amber waves of grain" Pence once talked about on his statewide radio show.
Indiana is an unhealthy state. Its people are under duress.
Our leaders have much soul-searching to do in the coming months.