The Agenda

Grace-Marie Turner on the Healthy Indiana Plan

Grace-Marie Turner has written a convincing defense of Gov. Mitch Daniels’s Healthy Indiana Plan, a program that uses HSAs to expand access to health coverage, against Michael Cannon’s charge that it is essentially PPACA in miniature: 

 

Traditional Medicaid promises virtually unlimited medical services, if people can find a doctor or hospital to provide them, with few if any financial obligations.

By contrast, HIP helps people transition from an entitlement program to a plan that operates much more like private insurance. It requires members to make monthly contributions (i.e., premiums) to a Personal Wellness and Responsibility (POWER) account. The state and the member both contribute on a sliding income scale, for a total of $1,100 a year.

Anything the member spends on health care comes out of the account first. If the account is exhausted, then “catastrophic” coverage is provided through Medicaid. State spending is capped at the revenues that are available, so enrollment is limited.

As Turner explains, HIP is designed to encourage self-reliance on the part of beneficiaries:

 

The state and the participants work in partnership to jointly fund the POWER account. Those closest to the income limit — 200 percent of poverty, about $22,000 for an individual — fund the account almost entirely on their own.

Three-quarters of those participating in the program make monthly contributions to their POWER accounts. (The rest don’t contribute because their incomes are below thresholds.) If people don’t make the required contribution to their account, they are tossed out of the program. Because of that, 97 percent make the payment, according to a Mathematica Policy Research study.

Turner suggests that HIP offers a model for Medicaid reform across the states:

 

And HIP also rewards people if they get preventive care. If they get screening tests, vaccinations, etc., all the funds remaining in their POWER account at the end of the year can roll over to the next to reduce the member’s monthly contributions.

This is exactly what we want our health-care system to do: provide incentives for individual responsibility in using the system and spending health-care dollars wisely, and rewarding people who follow sensible rules. And there is cost transparency: Members receive a monthly statement showing their POWER balances.

Seventy percent of those in the program have incomes at or below the federal poverty level and would be unlikely to have coverage otherwise, yet a high proportion have serious chronic conditions that likely would have landed them in hospital emergency rooms for care rather than doctor’s offices. …

Governor Daniels is doing us a favor by showing how Medicaid could be transformed into a program that would encourage individual responsibility and a wiser expenditure of taxpayer dollars without expanding massive open-ended entitlement spending as Obamacare does. Rather than criticizing Governor Daniels, we should be thanking him. [Emphasis added.]

I would go further: I wonder if something like HIP offers a broader guide for how to reform the U.S. health system.

Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

Most Popular

White House

The Mueller Report Should Shock Our Conscience

I've finished reading the entire Mueller report, and I must confess that even as a longtime, quite open critic of Donald Trump, I was surprised at the sheer scope, scale, and brazenness of the lies, falsehoods, and misdirections detailed by the Special Counsel's Office. We've become accustomed to Trump making up ... Read More
Education

An Idea for Student Loans: Get Rid of Them

Here is a three-part plan for something practical the federal government could do to relieve college-loan debt. Step 1: The federal government should stop making college loans itself and cease guaranteeing any such loans. Step 2: It should prohibit educational lending by federally regulated financial institutions ... Read More
White House

The Problem with the Mueller Report

So much for collusion. The media conversation has now officially moved on from the obsession of the last two years to obstruction of justice. That’s because the first volume of the voluminous Mueller report, the half devoted to what was supposed to be the underlying crime of a Trump conspiracy with Russia, ... Read More
Sports

Screw York Yankees

You are dead to me. You are a collection of Fredos. The cock has crowed, you pathetic sniveling jerks. The team I have rooted for since 1965, when I first visited the House that Ruth Built, where I hawked peanuts and ice cream a lifetime ago, watched countless games (Guidry striking out 18!), has gotten so ... Read More
White House

MoveOn.GOP?

Some of you will be familiar with a lefty, partisan Democratic organization called MoveOn, formerly MoveOn.Org. It was founded during an investigation into President Bill Clinton’s shenanigans (which were not, Democratic mythology notwithstanding, strictly sexual in nature) and argued that it was time for the ... Read More