Indiana vs. Obamacare
A conflict of visions.
One reason HIP may be viewed askance in Washington is that it is—quite deliberately—not an entitlement, but rather a means-tested, state-subsidized health plan available on a first-come, first-served basis until the allocated money is used up. The governor, who has balanced his budget for eight straight years and led Indiana into the elite of states with AAA credit ratings, insisted on not saddling the state with commitments he wasn’t sure it could keep. He’d watched nearby Tennessee enact the open-ended “TennCare” entitlement, then, drowning in costs, have to scale it back under a Democratic governor.
At the moment, then, whether Indiana will expand its Medicaid program, and whether HIP will survive for long in any form, remains in doubt, confirms Seema Verma, a health care consultant to the governor. Surely, though, the consumer-driven health plans for state employees will be left alone?
Not so fast, says Daniels. Obama-care has already forced expensive changes in CDHP coverage. Inclusion of dependents up to age 26 on their parents’ insurance, a newly required “summary of benefits explanation,” and free coverage of contraception together added roughly $2.5 million to the cost of the state program this year. It was not good enough, apparently, for Hoosiers to pay for birth control from their HSAs.
Regulatory burdens and “poison pills” can clog even the best of programs, but what might actually kill Indiana’s CDHPs, says the governor, is something called the “medical loss ratio”: the requirement under Obama-care that at least 80 percent of premiums be spent on health care delivery and quality improvement as opposed to overhead. Washington ought to allow money spent from Health Savings Accounts to count toward the 80 percent, but so far it hasn’t. Indiana’s popular, effective consumer-driven plans are thus in jeopardy.
It’s an epic clash: faith in experts and compulsory, abstract rules made far away versus respect for the choices of ordinary citizens and their locally elected representatives.
As part of his farewell to government, Mitch Daniels wrote a book last year distilling what he has learned working in business, working in Washington for two Republican administrations, and serving his home state. It’s called Keeping the Republic: Saving America by Trusting Americans, and the chapter on health care ends with a cri de coeur:
This is not grandiosity. The health care conundrum is quite properly seen in the context of the larger struggle over what sort of people we are and what policies are congruent with human nature. We really are facing that kind of a choice.
Claudia Anderson is managing editor of The Weekly Standard. William Anderson, a retired physician, teaches at Harvard University.