Conservatives swinging Pence’s way on health reform

“Mike Pence is the Koch brothers’ golden boy,” which is why “Indiana’s GOP governor [is] getting a pass” on his plan to expand Medicaid as called for by Obamacare.

That was the upshot of a column last week by Simon Maloy, the political writer at the liberal online magazine Salon. Maloy characterized as tepid the response given to Pence’s plan by Americans for Prosperity, the political action group funded by conservative businessmen Charles and David Koch.

Which, on the surface, seems utterly ridiculous.

Since unveiling his HIP 2.0 proposal in May, Gov. Mike Pence has taken a beating from his fellow conservatives, who feel he’s capitulating to what they consider the tax-and-spend scheme otherwise known as Obamacare.

Pence, of course, doesn’t see it that way. He has cast his new, expanded version of the Healthy Indiana Plan as a thoroughly conservative revamp of Medicaid, a program nearly all conservatives think is a failure.

But the more I think about it, the more it seems Maloy is on to something. Numerous things I’ve read this summer lead me to believe that conservatives, after waging war on Obamacare, including its large expansion of Medicaid, are swinging closer to Pence’s sensibilities on health issues.

(Interestingly, as I’ll note below, a significant new liberal proposal also moves, from the left, toward the same direction.)

That’s important for Hoosiers because it could help us understand where Pence would like to take things here in Indiana. It’s also significant for Americans, because Pence might be a presidential candidate in 2016.

What is this new direction? In general terms, it’s first an acceptance that some level of government subsidies and regulations are necessary improve the health care system. And then it’s a desire to make those subsidies and regulations as free-market-friendly as possible.

More specifically, conservative reformers are accepting three key parts of Obamacare: 1) that significantly reducing the number of the uninsured is a good goal, 2) that government subsidies are necessary to achieve that goal, and 3) that guaranteeing consumers coverage, even when they have pre-existing health conditions, must be part of the U.S. health care system.

In accepting these things, conservative health reformers are also rejecting three things have been non-negotiable conservative health policy talking points for the past two decades: 1) that the U.S. health system is the best in the world, 2) that the number of uninsured Americans is really not a problem because roughly three-quarters of them are either uninsured by choice, uninsured temporarily when between jobs or would qualify for existing government programs if they bothered to sign up; and 3) that any talk of universal insurance coverage is simply code for supporting a march to a single-payer health system.

“If 10 of the 11 freest economies in the world can establish universal coverage, it’s not impossible for the United States to do so in a way that is consonant with economic freedom,” wrote Manhattan Institute fellow Avik Roy in summarizing his mammoth, 68-page health reform proposal titled, “Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency.”

In short, Roy, who was a health policy adviser to Mitt Romney’s 2012 presidential campaign, proposes keeping Obamacare’s income-based tax credits to help consumers buy private health insurance. In fact, he even wants to extend those credits to low-income folks on Medicaid, so they can buy private insurance (which is getting awfully close to what Pence wants to do with HIP 2.0).

James Capretta, a health policy scholar at the Ethics and Public Policy, is another conservative who argues against repealing Obamacare.

“Some conservatives get nervous at the prospect of engaging in this kind of policy discussion. They would prefer to repeal Obamacare and then proceed with a series of very small, incremental changes to the pre-Obamacare health system,” wrote in his chapter in the book “Room to Grow", which includes a complete range of policy proposals from a group that calls itself “reform conservatives.”

“But that approach is unlikely to succeed because it will be criticized as undoing protections for pre-existing conditions and doing nothing to help low-income households without health insurance. It also falls short of the significant step toward a market-oriented system that we should take.”

Capretta favors four things:1) giving doctors and hospitals freedom to propose new ways to deliver care and be rewarded for saving money and improving patients' health; 2) capping the tax credit available for employer-sponsored health insurance and giving a similarly sized tax credit to individuals buying insurance on their own; 3) eliminating Obamacare’s “individual mandate” to have insurance and instead require insurers to cover anyone who maintains continuous insurance coverage; and 4) allowing states to try their own Medicaid reforms, using whatever money is currently being spent on that program.

That last idea has now been seized upon by a liberal think tank, the Center for American Progress. In a plan released Thursday, the center proposed Accountable Care States, which would be allowed to try to reform Medicaid—so long as they maintained at least existing levels of coverage and consumer quality.

That proposal, which conservatives will no doubt find too prescriptive, is a liberal acknowledgment that Obamacare is unlikely to meaningfully change the pace of health care spending growth over the long term—the exact conclusion also reached by the federal Medicare program last week.

Either way, both sides see opportunities to win over voters dissatisfied with certain aspects of the law. Liberals are looking to fix Obamacare’s shortcomings. Meanwhile, conservatives, possibly including Pence, are looking to use the law—and the public’s dissatisfaction with it—to achieve conservative goals previously beyond reach.