NCPA - National Center for Policy Analysis

Governor Pence's Medicaid Plan: Rhetoric vs. Reality

June 3, 2014

According to Josh Archambault, Jonathan Ingram and Christie Herrera of the Foundation for Government Accountability, Indiana Governor Mike Pence's Medicaid plan is an Obamacare expansion in disguise.

The authors compare the reality of the plan to the rhetoric surrounding it:

  • The Pence plan claims to be a block grant. However, it is structured like a typical government program with no real incentives or flexibility to control costs. It provides Obamacare Medicaid benefits to the Obamacare expansion population with Obamacare cost-sharing.
  • The plan introduces POWER Accounts, which are said to be like health savings accounts (HSAs). However, the plan is very different from the other HSAs at work in Indiana. The Pence plan does not require enrollees to contribute to the accounts, and taxpayers will fund 88 to 100 percent of the health account. Currently, Indiana's taxpayers pay 27 to 45 percent of HSA costs for the state's employees with HSA plans.
  • Rhetoric suggests that the plan will help 350,000 "working" Indiana residents. However, it creates a new entitlement for non-working, but able-bodied, adults, as the plan contains no work requirements. According to analysts, almost half of the Indiana residents expected to sign up for the Medicaid expansion do not work at all, and less than 14 percent work full-time jobs year round.

Archambault, Ingram and Herrera encourage states to reform Medicaid without expanding it, just as leaders in Florida, Kansas and Louisiana have attempted to do.

Source: Josh Archambault, Jonathan Ingram, and Christie Herrera, "Mike Pence's Indiana Medicaid Expansion: Rhetoric vs. Reality," Forbes, May 28, 2014.


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