GOP Guvs Still Testing Admin’s Limits On Obamacare’s Medicaid Expansion

Another Republican governor proposed another plan Thursday to expand Medicaid under Obamacare — sort of.

Indiana Gov. Mike Pence (R) said while announcing his plan at an Indianapolis hospital that he doesn’t want to simply expand the program and take the federal dollars that come with it. He wants to participate in this key piece of a law if, and only if, the federal government accepts his alternative proposal.

“I believe there are only two futures for health care in this country: government-driven health care or consumer-driven health care,” said Pence, who added that he still wants the overall law repealed. “Because of the success that Indiana has experienced … my administration is submitting a waiver to replace traditional Medicaid in Indiana.”

The Indiana plan would expand an existing state program, the Healthy Indiana Plan, which uses a health-savings-account model to provide care to low-income residents.

Pence proposed lifting the enrollment cap on the program, a major sticking point for federal officials, in exchange for using it as a vehicle for the state’s Medicaid expansion. Recipients would be required to make contributions to their health care, and, depending on their income level, could risk either losing some benefits or their coverage entirely for a set time period if they failed to make them.

It is the latest alternative Medicaid expansion proposal offered by a Republican governor, which have become something of a trend in the last year. And they present federal officials with a tough question: How far will the Obama administration go — and can it go, under federal law — to cover low-income Americans?

Pence’s announcement followed months of negotiations with administration officials, and the federal Centers for Medicaid and Medicare Services are for now expressing an openness to the plan, as they always have when a state releases a new expansion alternative.

“We are encouraged by Indiana and Governor Pence’s commitment to helping cover more of the state’s uninsured population through the Healthy Indiana program and look forward to seeing his proposal,” CMS spokesperson Emma Sandoe said in a statement.

This policy trend started with the U.S. Supreme Court’s decision in 2012 that Medicaid expansion was not required under Obamacare. States now had a choice about whether to extend coverage to residents with incomes below 138 percent of the federal poverty level.

More than 20 states have outright rejected the offer, which comes with 100 percent federal funding for the first three years and never less than 90 percent after that. But other states, with at least part of the state government controlled by Republicans, have used the new leverage under the Supreme Court decision to propose alternative expansion plans that are more palatable to conservatives.

And as the Obama administration has proved willing to accept some of those alternatives, states are pushing the administration to go further.

It started with Arkansas’s “private option,” a deal struck by Democratic Gov. Mike Beebe and Republican legislative leaders, which uses Medicaid dollars to pay for private coverage on HealthCare.gov. The administration agreed to that plan, and other alternatives have followed in its wake.

Iowa and Michigan have also had their plans approved by the administration. They included some additional provisions requested by conservative officials. Both have been allowed to require people making between 100 percent and 138 percent of the federal poverty level to pay premiums, with some restrictions and exceptions.

But while the Obama administration found those alternative plans palatable, governors have asked for more. Pennsylvania Gov. Tom Corbett (R) wants to charge monthly premiums and require Medicaid recipients to search for work, a provision that the federal government has never allowed. His proposal has been under review by CMS since March. Now Pence, who said he plans to submit his application in June after a period of public comment, has put forward yet another twist on Medicaid expansion.

It’s a risk for both sides. Medicaid expansion is popular with the public, much more so than Obamacare as a whole, and Republicans run the risk of backlash if they fail to participate. That might help explain why Corbett, who is facing a tough re-election bid, was willing to come around and make an effort.

The administration has to make a calculation as well. Arkansas’s private-option has proven a success, covering more than 150,000 people. So if federal officials can find a way to find flexibility under law to accommodate these proposals, they will succeed in extending health coverage to a lot of people. Indiana could cover up to 350,000 people under Pence’s proposal.

But with each approved alternative, GOP governors seem to be seeking more and more.