INDIANAPOLIS – With an array of historic, billion-dollar questions hanging in the balance, and a gnawing realization that the answers are increasingly elusive, the Indiana General Assembly and Gov. Mike Pence arrived at the halfway calendar point this week.
What became clear after a series of press availabilities Wednesday was that the Pence income tax is at the mercy of the economy and sequestration, as well as the biennial budget, which in turn is interlocked with the prospect of Medicaid expansion, which in turn is bound by an emphatically hostile political attitude toward President Obama and the Affordable Care Act, which, in reality, is the law of the land.
The inescapable murmur in the marble Statehouse hallways is the potential of a Pence presidential run in 2016. It is a prospect the governor and his people eschew, but it is the source of constant speculation and observers are beginning to look at the emerging decision set through that prism. Governors with presidential ambition find their policy decisions scrutinized through a political lens. Gov. Evan Bayh was always perceived differently than, say, Bob Orr or Frank O’Bannon.
In the past two weeks, a parade of conservative, Republican governors – all greatly hostile to Obamacare – have made the controversial call to expand Medicaid during a three-year period when the federal government will pick up 100% of the costs. Ohio’s John Kasich, Michigan’s Rick Snyder, Florida’s Rick Scott and, on Wednesday, New Jersey Gov. Chris Christie, himself a potential presidential rival of Pence, have begrudgingly opted for Medicaid expansion.
As Christie put it, “Let me be clear: I am no fan of the Affordable Care Act. I think it is wrong for New Jersey and for America. I fought against it and believe, in the long run, it will not achieve what it promises. However, it is now the law of the land. I will make all my judgments as governor based on what is best for New Jerseyans.”
“This makes sense for the physical and fiscal health of Michigan,” Snyder said in a Feb. 6 statement.
Pence, however, described it in political terms, talking about the “gift of a baby elephant”:  “Where the government says, ‘Here’s a baby elephant. We’ll agree to pay for the hay for the next five years,’” Pence said, adding, “Washington is broke, with more than $16 trillion in national debt.”
Indiana Senate President Pro Tempore David Long, speaking in the Senate chambers Wednesday about an hour before Pence, acknowledged the exclusion of the Pence income tax cut from the House-passed budget.
“I don’t have an answer for you right now,” Long said of whether the Senate would reinsert what has become Pence’s top legislative priority. “We remain very, very, very concerned about some costs coming down the road in Obamacare. The continued costs just shake us. Medicaid, if we don’t do any expansion, will cost us $1 billion. That’s without any expansion.”    
Long noted that State Sen. Pat Miller’s bill to expand the Healthy Indiana Plan passed the Senate, but quickly acknowledged that no one knows what the cost of HIP will be, even while denouncing Medicaid expansion in general. “I’ve never heard an answer if we just did the HIP plan,” Long said. “Can we afford that?”
But key Republicans view opting into the Medicaid expansion with the feds picking up 100% of the costs through 2020 as a slippery slope or Hotel California: once in “you can never leave” as the Eagles might croon.
“What happens in three years?” Long queried when asked why Indiana wouldn’t opt in for the three years when the federal government picks up 100% of the cost. “That’s the question. I don’t know any leader, Republican or Democrat, I’ve talked to who believes that in 2020 when it goes to a 90%-10% share that it will be a lot worse than that. You continue to see reports of the costs of this program going way above what they were. How are you going to pay for that? I’ll tell you what they’re going to do, they’re going to pass along the costs to the states. That’s the federal system: Pass it down to the states. Now is that an unfunded mandate? Not if we go along with it, I guess.”
Howey Politics Indiana asked Long about the scenario that House Public Health Chairman Ed Clere raised earlier this month: The factory worker father and the Dollar General clerk mother who stay off welfare, are within th 138% of povery band, but have little or no health coverage. A catastrophic health event bankrupts them.
“That’s a tough question, but I don’t think it’s unfair,” Long answered. “That’s why people say we’ve got to take a look at it. To jump into the pool right now, without a better idea, is something we have to be very cautious of. I’m not saying never, either. That is the other side of the coin: What do you do about people who are working and can’t afford insurance? That’s the debate nationally. Until you have a better sense of what it is going to cost taxpayers, which I think is going to be a lot, and I think we’re looking at a tax increase and it’s going to be a significant one if we’re not careful here, I don’t think you can just expand Medicaid. We don’t have enough answers.”
While Gov. Pence and state lawmakers need elusive answers, a significant part of the blame has been the slow pace of rules coming from the federal government in the wake of Obamacare, solidified by President Obama’s reelection last November.

Medicaid expansion bill passes
SB551 authored by Sens. Patricia Miller and Luke Kenley passed the Senate Wednesday by a 44-6 vote, giving what the authors called “flexibility” in installing Obamacare. The main provision of the bill seeks federal approval to expand HIP to all Hoosiers who earn up to 138 percent of the federal poverty level as a substitute to the ACA’s Medicaid expansion. It would also ask the federal government to provide Medicaid funding in the form of a block grant so Indiana could administer the health-care program with greater flexibility.
“The Healthy Indiana Plan provides low-income Hoosiers with access to health care in a way that promotes personal responsibility and financial accountability,” Miller said. “It has worked extremely well in our state for several years now, and I would like to see it continue. Indiana should have the option to pursue a health care plan that works for Hoosiers, instead of being forced to implement a one-size-fits-all Washington mandate.”
“In terms of federal health care costs and Medicaid expansion, legislators and all Hoosiers must be aware that whatever commitments we make today are going to be commitments we have to fulfill for a long time,” Kenley said. “The Affordable Care Act is a huge expense, and we must push to come up with the right option for Indiana. We need a program that encourages people to use consumer attitudes, where they measure the cost and share in the cost. HIP may be our best option to do that. This is still a work in progress.”
Seven Democratic senators voted with the chamber’s Republicans Tuesday for the expansion, despite reservations about using HIP.
The problem with HIP is while it serves about 46,000 people, more than that are on a waiting list. The Medicaid expansion poll has been put in the 400,000 range.
While lawmakers talk about future health care costs, there is little acknowledgement that people at or just above the poverty line are turning up in Indiana emergency rooms, at a cost of close to $3 billion annually, a fact most Republicans don’t speak about.
The predominant GOP view comes in the context of taxation levels, as opposed to insuring the lower middle class.
“At least the leadership is all in favor of not using Medicaid expansion as the vehicle here because of the potential for massive cost in the future,” House Speaker Brian Bosma told the Associated Press on Tuesday.

Democrats react
House Minority Leader Scott Pelath, D-Michigan City, applauded Bosma for bipartisanship, but said in reality there is a need for “tripartisanship.”
“There are two Republican parties at the moment,” Pelath said. “What we have here are two groups: One that is conservative and pragmatic and wanting to work together for the people of Indiana. We have another group that is extremely ideological and unwavering in the policies they want to impose on others. That’s problematic because we don’t have a clear message coming from the Republican majorities and the governor. We don’t have a clear direction for Indiana. I’m not sure that’s good for the state because the state deserves clear alternatives they can choose from. We don’t have that at the moment.”
Pelath then pointed to the Medicaid/HIP debate. “The consequences are that we fail to pass the biggest jobs bill of the 2013 session,” he said. “Maybe the biggest jobs bill of a generation, and that’s the health care expansion. It was slaughtered on the altar of national politics. That’s regrettable. There’s a possible 30,000 private sector jobs to come from serving people in clinics, in doctor’s offices and not emergency rooms and it withered on the vine of the House calendar the other day. That’s regrettable. Thirty thousand Hoosiers could be hired by hospitals and health care providers. I understand that at President Long’s press conference, Gov. John Kasich was exposed for being a left wing radical.”
Pelath then quoted Kasich: “I can’t look at the disabled, I can’t look at the poor, I can’t look at the mentally ill and I can’t look at the addicted and think we ought to ignore them.”
]“I think Gov. Pence ought to embrace the recommendations from neighboring governors and even people like Rick Scott in Florida,” Pelath said. “We need to make sure every Hoosier is seen by a doctor who’s not in an emergency room as the first order of health care.”

Pence tax cut (& sequestration)
When Pence met with the press, he once again made his case for the income tax cut, insisting there is great value in Indiana being the lowest tax state to be a magnet for jobs. He said he had been traveling the state making his pitch for the income tax, and said audiences were “very receptive.” But he quickly transitioned to the external forces crimping the tax cut, which was omitted from the House passed budget prompting his “disappointment.”
“We’ve talked to members of the General Assembly and sequestration is on their mind,” the governor acknowledged. “And not so much the impact on the cuts themselves, but the potential economic impact of that. That’s why, as you all know I’m a conservative and not in a bad mood about it. I understand and appreciate people being cautious when it comes to public resources. I remain confident our revenue forecast is correct and our revenues are going to remain strong, but that’s an issue that’s been raised, among others.”
Pence added, “We have been assured by leaders of the General Assembly that assuming the revenue forecast in April is as strong as it was in December, the income tax cut will be up for inclusions in the budget.”
Which then led him to HIP. He was asked what happens if the feds reject his HIP proposal.
“Let me speak broadly . . . “ Pence began, with one reporter suggesting he be more specific. “ . . .  this issue of Medicaid. First, it is important to point out to people that Medicaid is set to grow significantly in the next few years under the existing program. Last estimate I heard was some 90,000 Hoosiers. I am very proud to say the budget we submitted fully funds that program. That’s not an inconsequential number. We stand by that and will work hard to fully fund that Medicaid program as it exists today. Secondly, the Healthy Indiana Plan is a plan we strongly support. It is perhaps the most innovative, consumer-driven health care plan of any state in the country. We are determined to preserve it. In my conversations with the administration, with Secretary Sebelius, and the White House, and colleague governors this weekend, we made it very clear that our first objective . . .  is that we preserve that innovative program, which is extraordinarily popular among its recipients. And it’s popular because it’s good for them . . .  and good for the fiscal health of our state. The Healthy Indiana Plan meets both. It removes people from emergency room care to primary care. It encourages people to embrace preventive medicine. It’s the kind of program that improves people’s lives.”
Yet, no one can provide contrasting data on the costs of HIP and Medicaid expansion.
Pence said that Medicaid “is a system that’s broken,” adding that it is “rife with fraud and waste and I don’t think it serves the interests of Hoosiers . . . and the long-term interests of Hoosier taxpayers. That being said, I’ve made this very clear to Secretary Sebelius, we would be willing to consider an expansion if it began with a discussion based on the framework of the Healthy Indiana Plan. The reality is, with the extraordinary inflation of costs in our health care economy, most experts left, right and center say the real answer is preventive medicine. The real answer here is to encourage people to take more ownership in their health care.”
Kathleen Sebelius is U.S. Secretary of Health and Human Services.

Winston Churchill famously described the Soviet Union as a “riddle, wrapped in a mystery, inside an enigma.”
The interlocking issues of Indiana tax cuts, budgets and health care are splinted to the federal government, which in turn politically antagonizes a large section of the Indiana General Assembly, to the point that Sen. Long has launched a constitutional convention bill that would tamp down federal intrusion on the states.
What became utterly clear on Wednesday is that many answers are elusive and they represent critical data needed to make good decisions.
So the entire process seems steered more by political realities as opposed to independent metrics.
The cynics suggest that Gov. Pence is making a political decision to position himself for 2016. Not only did Gov. Christie opt for Medicaid expansion, but he was excluded from the Conservative Political Action Conference (CPAC) convention this year. The political animals contend that Pence is making policy decisions with presidential bearings in mind. However, the rejection of his No. 1 priority would damage those prospects. It prompted Pelath to speculate, “I think Sen. Kenley will try to salvage the governor’s tax cut. They’ve got to bail the governor out somehow.”
The Indiana General Assembly and Gov. Mike Pence may be at the calendar halfway point in the 2013 budget session, but in reality, the need for so much more information – and open, inquisitive minds to go with it – became abjectly evident on Wednesday.