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Mitch Daniels’s Obamacare Problem
His state’s health-care plan promotes dependence on government.

By Michael F. Cannon


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Mitt Romney isn’t the only Republican presidential hopeful with an Obamacare problem: Indiana governor Mitch Daniels, were he to become the GOP’s nominee, could also undermine the repeal campaign that has united the party’s base and independent voters.

To be sure, Daniels’s Obamacare problem is less obvious than Romney’s; the law that Romney signed as governor of Massachusetts in 2006 is essentially identical to Obamacare. It sent insurance premiums higher and left Massachusetts struggling with runaway Medicaid spending. Romney’s stubborn “no apology” stance on his own law could sink the repeal effort by making it appear unprincipled and political. President Obama is already laying the groundwork, most recently by reminding the National Governors Association that Romney remains “proud” of Romneycare.

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But Mitch Daniels’s record also bears similarities to Obama’s, and his approach to Obamacare as governor has been an anchor on the repeal movement. Like Obama, Daniels increased cigarette taxes to expand government-run health care. Whereas Obamacare requires states to open their Medicaid programs to families of four earning $31,000 (138 percent of the federal poverty level), Daniels expanded Indiana’s Medicaid program to families of four earning $44,000 (200 percent of poverty). From 2008 to 2010, Indiana’s Medicaid enrollment spiked: Adult enrollments grew 21 percent, a rate nearly double the national average. By 2010, Daniels had enrolled another 62,000 Hoosiers in government-run health care.

Daniels and his conservative fans make much of the fact that this “Healthy Indiana Plan” (HIP) offers high-deductible coverage combined with a taxpayer-funded health savings account, whereas Obamacare simply expands traditional Medicaid with its notoriously lousy access to care. But that’s just another way of saying Daniels made Medicaid more attractive: Under his plan, the government hands out coverage plus something a lot like cash.

Conservatives should not consider it a selling point, then, that 94 percent of HIP enrollees are satisfied with the program, or that HIP enjoys a much higher retention rate than the regular Medicaid program, or that HIP’s waiting list is now 50,000 Hoosiers long. Health savings accounts are supposed to reduce dependence on government. Daniels is using HSAs to expand dependence on government.

Also like Obamacare, HIP is fiscally unsound and pushes states’ Medicaid costs onto federal taxpayers. Every $1 Indiana spends on HIP triggers at least $2 of spending by the federal government; no matter what state you call home, you’re paying for Mitch Daniels’s government-run health-care plan. Even so, an independent review found that Daniels’s cigarette-tax hike hasn’t kept pace with Indiana’s share of the spending, and further cost overruns may be on the horizon. If Obamacare remains on the books, Daniels wants to put all new Medicaid enrollees into HIP, with the feds paying 100 percent of the cost.

Meanwhile, Daniels is stunting both the momentum for repeal of Obamacare and his credibility as a standard-bearer for it. Indiana was party to a lawsuit in which a federal judge declared the entire law unconstitutional and void. That court order relieved Daniels of any obligations Obamacare creates. Shortly after that ruling, however, Daniels orchestrated a letter co-signed by 20 other governors suggesting “improvements” that they would like to see before implementing their own Obamacare bureaucracies. While those changes would effectively gut much of the law, they would leave Obamacare’s entitlement spending intact, and would even allow governors to offload the cost of their Medicaid programs onto taxpayers in other states.

The letter’s biggest flaw may be strategic. “Why is Governor Daniels,” wrote Pacific Research Institute health-care expert John R. Graham, “extending the hand of peace . . . when Obamacare has been mortally wounded in the courts and the U.S. House of Representatives?”

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COMMENTS   58

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   03/04/11 07:07

Your fairy-tale completely falls short of reality.

The H.I.P. plan in Indiana is "Means-tested" and is only avaialble to the lowest of income families in Indiana...Oh, plus IT ISN'T MANDATED BY LAW!!! There are no forced penalties if low income families do not want to sign up for it. It is 100% paid for in the Indiana Budget and does not create a budget deficit.

You state that in Indiana Medicaid enrollments went up 21% from 2008-2010...well, that's because this time frame parallels the countries financial collapse and Indiana (a manufacturing state) took a pretty hard hit in the unemployment lines. Common sense tells you that increased unemployment will cause increased Medicaid enrollment. This plan has proven to be helpful to those who need a hand-up and aren't just looking for a hand-out. Since this is a "Mean-Tested" program the elegibility guidelines are pretty strict and once a person/family reach a certain point of financial stability they will no longer qualify.

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   03/04/11 07:18

You state that Fed. Judge Roger Vinson reversed his initial order forbidding the Obama administration to implement the law...this is only a half truth as all he did was give them a week to provide proof of the constitutionality of the law and appeal his decision with the 11th Circuit Court of Appeals...hardly a policy reversal.

Now, you did not provide a single reference to research when claiming that Daniels was already implementing the Omabacare law. Assuming I'm taking you at face value, doesn't it make more sense for State governments to at least consider the possibility that the Supreme Court could side with the Obama Admin? Obama has stated that if the States refuse to implement the law on their own terms the Feds will do it without State input....Nice work Florida and Alaska Governors....I think their actions are fairly irresponsible to their voting constituents.

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   03/04/11 07:25

I'll finish posting with this thought. Governor Daniels has laid out a plan that shows states how to use the Medicaid/Medicare system responsibly and without causing deficit shortfalls in their budgets. He's also show compassion to the lowest of income families in Indiana in a time that stability is not a guarantee in any aspect of our lives...least of all those who cannot find work to cover their home expenses let alone any medical expenses.

Your 'Smear' piece on Governor Daniels is shameful and National Review should have used better discernment when allowing you to manufacture this dribble. I hope your book "Healthy Competition: What's Holding Back Health Care and How to Free It" contains a better analysis of the issues than your online article did.

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   03/04/11 08:12

Why do I get the feeling that come January 2013 we will be preparing for the reinauguration of Barack Obama?

The republicans can't seem to shoot themselves in the foot often enough to stop them from doing it again and again. I thought that was a court martial offense.

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   03/04/11 08:31

Stick a fork in both Daniels and Romney. They're done.

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   03/04/11 08:41

This is not the first article I've read from you people recently that, pretty obviously, tries to push us away from supporting Governor Daniels bid for the Presidency. I'll have to check into it further, but the only reason, I can imagine, that you are editorially against him, must be due to his views on foreign policy. I suspect he doesn't support perpetual war and wants to dramatically cut defence spending. It can't be that he is too much of a fiscal conservative.
I wish you would tune into the fact that the National Review, and it's Neo-Conservative roots, is not the only source of information an engaged public is using to become informed.
Besides, Daniels would wipe the floor in a debate with Obama. As would Christie, Ryan or Paul for that matter.

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   03/04/11 08:48

@RA,

This funny how people have different perspectives. I think this is the first article that I have seen at National Review that is criticial of Mitch Daniels at all.

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 JPK
   03/04/11 09:11

"You state that in Indiana Medicaid enrollments went up 21% from 2008-2010...well, that's because this time frame parallels the countries financial collapse and Indiana (a manufacturing state)..."

jduval,
Your post just reinforces what the author stated. You don't measure the affordability of a given program when times are good; you meaure thier sustainability when times are bad and coffers are empty. Daniels' Healthy Hoosers program (or whatever they call it in Indy) is too generous with the public's money. Yes, it is means tested, but what does that matter when a family of 4 earning $35,000/year is eligable?

Mitch is no conservative. He displays many of the tendencies that Bush43 displayed. He is moderately progressive, and in many ways he doesn't have a problem with much of Obama's agendIa. He will be one of those GOP pols who wishes to fix ObamaCare, and not repeal it.

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 JPK
   03/04/11 09:16

"Assuming I'm taking you at face value, doesn't it make more sense for State governments to at least consider the possibility that the Supreme Court could side with the Obama Admin?"

Nope. Not in the least bit. They're plantiffs. And after Vinson, they are under no obligation to implement anything in ObamaCare.

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 prp
   03/04/11 09:28

Geez, Indiana is everywhere this morning on NRO.

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   03/04/11 09:34

@JPK-

The Data in this article is skewed. The reality is, here in Indiana while a family of 4 that gross' $44,000 may qualify to "APPLY" for the program they do not automatically qualify...it's all based on avaialable funds. That's why the Author also stated there are 50,000 on a waiting list

And, yes...you're right. The states are in no way obligated to implement the law. My point was, there is no stated proof in the article that Daniels has already started implementation (as all of his comments on Obamacare state that a REPEAL of Obamacare is the ideal choice) but if the U.S. Supreme court happens to over-rule the Florida judge (which no one can predict at this point) wouldn't it be better if these Governors at least had a plan in place to control the implementation of the forced program to avoid allowing the Feds to do it? If the Feds step in to implement the state voters lose any say as to how things go down.

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   03/04/11 09:37

AND FURTHERMORE.

Anyone can call anyone else a RINO or Not a Conservative or Liberal Panderer or whatever other sladerous comments against Daniels they choose.

But NOBODY including you JPK has ever cited a single policy that Daniels has signed into law that would support your charge. He has the most conservative record of any politician in the country over the span of his Governorship. The facts of his policy and voting record prove it. Levin and Rush can't provide any details to the contrary either because it is rubbish.

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James Thomas
   03/04/11 09:42

Could it be possible that the increased number of Hoosiers enrolled in Medicaid might benefit some friends Governor Daniels made while he was an executive at Eli Lilly? Might his Lilly experience also explain why he wants to keep ObamaCare in effect?

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   03/04/11 09:47

Mitch Daniels is his own worse enemey. Rush and Levin don't need to say anything about him.

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   03/04/11 10:16

Why would anybody be surprised that there are "plants" -marxist democrats- in the republican party? Like obama's government takeover of healthcare, daniels implementation of it is a move to a soviet style government run healthcare system where the government decides who lives and who dies. The people of Indiana will soon realize that daniels shares the same "fundamental transformation" of America to marxism that obama is pushing so hard.

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   03/04/11 10:25

jduvall says .."[Daniels has] also show compassion to the lowest of income families in Indiana in a time that stability is not a guarantee in any aspect of our lives..."

Me: I'll assume Daniels isn't using his own money to help all of these families and make the point that confiscating someone's property and giving it to someone else isn't showing compassion.

However, it is showing us that Daniels is not the conservative standard bearer some want to make him out to be.

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   03/04/11 10:43

This is an interesting article about Daniels being punked by the unions at BigGovernment.com:

Great question by Fox News’ Neal Cavuto to Indiana Governor Mitch Daniels: “I am wondering if you just got punked?” Daniels responded that he did not understand the question, and then proceeded to answer his own question. (transcript)

Yes, the governor and Republican House Speaker Brian Bosma were punked by Big Labor Democrats in several ways:

•The Governor tossed aside a law providing every Hoosier the right to choose whether or not to belong to a union, better known as the Right To Work. With f Democrats rattling sabers, Daniels chose to discard Right To Work and got nothing in return.
•For months prior to the Democrats’ fleeing the legislature and the job for which they were elected, Daniels and Speaker Bosma went from meeting to meeting predicting that introducing Right To Work would cause Democrats to throw a legislative tantrum. They telegraphed that they were not going to fight for this employee emancipation issue. Democrats knew that Daniels would quickly give them what they wanted most: dropping Right To Work, and Daniels delivered.
•Because Daniels and Bosma said that they intended to blame the Democrats’ childish behavior on the Right To Work bill, the Governor handed Democrats an excuse to justify their actions. Worse, Daniels continues to repeat his “blame Right To Work game” every chance he gets. Daniels’ actions provide cover for the scurrying Democrats. But, as Cavuto pointed out, the Governor’s team quickly caved on Right To Work, and yet, the Democrats did not return.
•Sadly, the Governor weakened his own bargaining hand. Because Right To Work was quickly tossed, Democrats have every reason to believe the Governor and Bosma will cave on everything else. And, having already caved, it will be harder for Governor to justify standing his ground. This is why Democrats aren’t back in Indiana yet!
Yep, Daniels was “punked,” if Cavuto means losing the battle before it began. Indiana gave public teachers the Right to Work in 1995, but Gov. Daniels refused to even fight for freedom for private sector employees.
Daniels can continue to talk about what he did in 2005 when he rescinded an executive order relating to union monopoly bargaining privileges over state government employees, but Daniels’ rescission can be easily overturned by the next governor. As Daniels seems to be learning, legislative battles, like the one in Wisconsin, take more fortitude.

Thanks to the Daniels’ strategy, Big Labor has already won. The item that they fear most, free choice for workers, was taken off the table before the Democrats left town; anything they get from here is “gravy.”

Hoosiers need jobs. Killing Right To Work killed Indiana jobs. Gov. Daniels has repeated on several occasions, that without Right To Work, at least 1/3 of the employers looking to bring jobs to Indiana cross the state off their list.

Balancing government budget is very important, but it will not create as many jobs for Indiana as a Right To Work law will. Companies are fleeing states bordering Indiana and many others are planning their possible relocations now, and even Daniels admits Indiana is off the list already for many.

By kicking the Right To Work bill down the road, the governor by his own admission removed Indiana from the relocation choices of a third of the potential new and expanding would-be Indiana employers; while simultaneously saddling hard-pressed Hoosiers with the continued burden of forced union payments.

Actually, it sounds like the citizens of Indiana are the ones who have been punked.

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James in CA
   03/04/11 10:47

State and Federal governments need to get out of the nanny business. Healthcare should be handled on a state and local level, thus, the feds should stop trying to use this as a platform for 'regulating' citizens, i.e., nannyism.

As soon as the feds start dictating to citizens, freedom is on the block. I would rather have no healthcare than have the feds dictating to me.

As for states, this should be handled on a local level, if there are problems the state should work with local community (city) to see how this can be solved on a local level (i.e., communities taking care of their own needs). This would strengthen real, face to face relationships, and remove the fraud and corruption that results from money being collected by government and then doled out to people.

Money is the problem, everyone worships money and it causes all manner of corruption and vice in government.

The closer to the source that we can keep the money, the less corruption and waste, and the most good it will bring about.

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   03/04/11 11:04

@ Dollar Bills-

Well, he pays taxes just like the rest of us do so some of it is his money. I guess the underlying theory that I get from you is that as a conservative you MUST take the position that regardless of peoples conditions and circumstances they should not even have the smallest of hand-ups from any government involvement at any time?

Well, because of H.I.P. Indiana has budgeted some of the healthcare costs and avoided those E.R. visits that the uninsured pass on to the hospitals and ultimately YOU!!

NO ENTITLEMENTS!!! Right?

Let's get rid of Medicaid, Medicare, Farm Subsidies, Unemployment assistance, USDA, Child-protective agency, Food Stamps...etc.

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   03/04/11 11:15

Again, you can call him weak or 'Not a Conservative standard bearer' or....(insert your insult here).

But you have still not offered any legislation that he's signed that compromised the conservative position.

He preached for 6-8 months that Right-to-Work was a valid choice for Indiana....if it was vetted with the voters prior to the election...it wasn't even an election issue for Repubs and they (like Wisconsin) are in jeapardy of not getting a single campaign issue accomplished because of their foolishness. How will that play with their voters?

And to "Dollar Bills" are you advocating that the wealthiest country in the world who pays Billions in foreign aid and has the most innovative medical industry in the history of mankind should not offer some sort of help to their poorest of citizens???? Dude that is not conservatism.....I don't think anyone should live off the system, but a hand-up is not a bad thing to offer people that need a boost back to productivity.

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