Calls Medicaid System “Broken” in Letter to Secretary Sebelius

 INDIANAPOLIS - Governor Pence today flatly refused to expand the traditional Medicaid program in Indiana.

In a letter to Health and Human Services Secretary Kathleen Sebelius, Pence requested federal approval to use the innovative Healthy Indiana Program (HIP) to serve an expanded Medicaid population. Pence cited fundamental flaws in the traditional Medicaid program and announced that Indiana will not expand the program.

“Medicaid is broken,” said Pence. “In Indiana, an expansion of traditional Medicaid under the Affordable Care Act would cost our taxpayers upwards of $2 billion over the next seven years.”

Pence asked that HIP, which has bipartisan support, serve as the starting point for all future discussions of health care reform in Indiana.

The innovative, consumer-driven plan has a strong track record of success. HIP has addressed rising health care costs by significantly increasing preventive services among its members and encouraging consumers to make cost-conscious choices. Ninety-four percent of HIP members are satisfied with the program, and 99 percent say they would re-enroll.

Pence called for the HIP model to be used as the basis for a reform of the entire Medicaid program. He urged the federal government to grant states greater flexibility to tailor innovative Medicaid programs to meet the needs of their citizens.

“Greater flexibility would help states create and manage a program that is consistent with their local values and overcome the bureaucratic and inefficient nature of traditional Medicaid,” said Pence.

The Administration fully funded Indiana’s Medicaid forecast in its proposed budget, but will not pursue further expansion under the current system.

Pence requested HHS grant Indiana the maximum three-year extension for HIP, which would allow the program to run through 2016.

The waiver is posted here. Governor Pence’s letter is available here.

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