INDIANAPOLIS (AP) - Indiana Gov. Mike Pence asked the federal government
Wednesday to approve a three-year extension of the Healthy Indiana Plan
health savings accounts in lieu of an expansion of the federal Medicaid
system he called “broken.”
Pence wrote a fiery letter to Health and Human Services Secretary Kathleen
Sebelius on Wednesday saying Medicaid is fraught with “waste, fraud and
abuse,” while also seeking approval for the HIP extension.
"Medicaid is broken. It has a well-documented history of substantial waste,
fraud and abuse. It has failed to keep pace with private market innovations
that have created efficiencies, controlled costs and improved quality,” he
The Indiana Family and Social Services Administration requested a waiver
from the Centers for Medicare and Medicaid Services, seeking to enroll
residents who earn up to 138 percent of the federal poverty line in the HIP
program - a move that would effectively cover roughly 400,000 residents
through health savings accounts instead of traditional Medicaid.
It was not immediately clear Wednesday evening whether the waiver would
qualify the state for the roughly $10.5 billion in federal aid that would
come with a traditional Medicaid expansion. The determination would hinge on
who is defined as “newly eligible” under the law - a measure that could
encompass everyone above the level the state currently provides for, or just
above the federal poverty level.
House Minority Leader Scott Pelath, D-Michigan City, said Pence’s move puts
thousands of jobs at risks by playing politics with the expansion. Pelath
and other supporters of the expansion have called it - and the federal money
that would come along with it - a “jobs measure” more than anything else.
"I fear that two words keep getting in the way of doing what’s necessary:
Barack Obama,” he said of Indiana Republicans’ rejection of the Medicaid
It’s unclear whether the federal agency in charge of Medicaid will sign off
on a longer extension and expansion of the Indiana program. The agency
approved a one-year extension last month but ruled out minimum payments.
Former Gov. Mitch Daniels sought a three-year extension of the program in
2011, but was rejected.
An HHS spokesman said he was reviewing Pence’s letter and waiver request.
The state filed its application Wednesday as state lawmakers sought a
similar work-around to approving an all-out expansion.
The Senate’s health committee approved Wednesday afternoon a measure that
would expand Medicaid through the Indiana program while asking the federal
government to deliver the additional aid to the state as a block grant. A
House panel unanimously approved a similar measure through Wednesday
Throughout the debate lawmakers have argued over the price of a Medicaid
expansion. The actuary hired by the state has delivered a worst-case
scenario that assumes Indiana would pay out $2 billion for the expansion.
The Indiana Hospital Association released a study this week showing the
state would pay out $503 million over that same period and pull in roughly
$10.5 billion in federal aid.
The difference between the two rests in part on whether doctors are paid
back at 80 percent of the Medicare rate, as the state actuary assumes, or 60
percent, as the hospital group estimates.
But the cost to the state of expanding through the HIP program is still
“How do you know the fiscal impact of an expansion, but you don’t know the
fiscal impact of a HIP expansion?” asked Sen. Greg Taylor, D-Indianapolis.
Senate Health Chairwoman Pat Miller, R-Indianapolis, responded: “Sen. Taylor
I can’t predict the future. What I can tell you is, I think Indiana has a
better way to address this issue. I would like to try this as an