- - Tuesday, June 3, 2014


Mike Pence is a rising star of Republicans, and has been for years. During his 10-year membership in Congress, he held the No. 4 leadership position in the House and topped the 2010 Values Voter Summit presidential preference poll. He became governor of Indiana last year with his conservative bona fides in order.

That’s why it’s puzzling that Mr. Pence last month announced a scheme to expand Medicaid in Indiana, inflicting a major element of Obamacare on patients and taxpayers. Called “HIP 2.0,” the Pence plans co-opts the existing Healthy Indiana Plan — a Medicaid program devised by his predecessor, Mitch Daniels — to make Medicaid larger to satisfy Obamacare requirements.

Mr. Pence wants conservatives to embrace Medicaid expansion as a responsible, limited-government alternative to Obamacare, writing in an editorial essay in The Wall Street Journal and in a speech to the American Enterprise Institute. Include us out.

The Healthy Indiana Plan offers 40,000 people health savings accounts that enable them to take control of their health care. Since individuals keep money that isn’t spent in their own account, they have an incentive to spend their health dollars wisely. The frugality saves taxpayers 25 percent over the cost of traditional Medicaid. That’s conservative.

Mr. Pence applies this good idea to a new population of mostly able-bodied, working-age adults with no children to support. Indiana would enroll more than 284,000 new people into Medicaid. This obligates another generation to government “generosity.”

It’s a more attractive dole, to be sure, but it’s still a dole, paid for with an enormous new federal credit line. The more people who sign up for Mr. Pence’s “conservative” experiment, the bigger Indiana’s Obamacare check from Washington.

Mr. Pence is not a fan of Obamacare. He has opposed it in the past, and he opposes it now. The governor envisions his approach as a successful model that would eventually replace the government-run health care catastrophe. “Any sensible repeal of the Affordable Care Act,” says Mr. Pence, “should be replaced with market-based reforms and a flexible Medicaid block-grant program.”

Block grants are tempting because they promise freedom to run programs without distant bureaucrats ruining home-grown solutions. Unfortunately, there are enough strings attached to Obamacare’s funding of Mr. Pence’s Medicaid expansion to enable him to open a marionette factory in Indianapolis.

Iowa sought 10 different exemptions from the administration to implement the Iowa Health and Wellness Plan to expand Medicaid. Of those 10 requests for flexibility, nine were denied and the 10th was authorized for only one year. There is no reason to expect the White House to be any more sympathetic to Mr. Pence’s request for a few market-based provisos in his Medicaid expansion plan.

Indiana’s impulse to reform is worthy, but the impulse to expand must be resisted, because ultimately we’ll all be paying for this “generosity.” Mr. Pence places far too much faith in government’s interest in doing the right thing. The Indiana approach, impressive as the results may be, is not likely to inspire national reform.

For most states, Medicaid is the No. 1 budgetary expense. Expanding enrollment, no matter the motivations, is fiscal suicide. We hope Mr. Pence thinks again before that rising star begins to fade.

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