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Posted at 12:15 PM ET, 03/ 4/2011

The GOP’s Mitch Daniels problem — and vice versa

By Ezra Klein

Writing in the National Review, Cato’s Michael Cannon makes a really strong case for Gov. Mitch Daniels.

“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),” Cannon notes. “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.” And how’d he pay for this? A cigarette tax.

But it wasn’t just a straight expansion, as Cannon explains. Daniels “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.” And how do Hoosiers like it? The numbers speak for themselves: “94 percent of HIP enrollees are satisfied with the program....HIP enjoys a much higher retention rate than the regular Medicaid program...[and] HIP’s waiting list is now 50,000 Hoosiers long.”

There’s just one thing that’s a bit weird: Cannon’s piece is an attack on Daniels. It’s entitled “Mitch Daniels’s Obamacare problem” and concludes that in trying to make government health care work better for his constituents, Daniels has done too much to legitimize government health care in the eyes of conservatives and libertarians. It’s as telling a look on the way the right is currently approaching health-care reform as you’ll find, and I recommend reading it in full.

By Ezra Klein  | March 4, 2011; 12:15 PM ET
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wait I thought HSA's don't work and everybody hates them yet you now put this up as proof that they do work in reining in costs and yesterday you showed a piece that showed actuarily they had between 76 and 93% actuarial value depending on contriubtions.

Imagine if our good state workers of NJ could be offered an HSA that would increase their salary by say 8% if they opted for it and the savings would greatly outweigh the increase in salary. I guess that makes too much sense. Heck it'd even increase tax revenues. Win, Win, WIN.

Personally I'd love to see Governor Daniels run but as i've heard said you'd need a half billion dollars to run a Presidential campaign and its getting very late for any of these guys to start putting that war chest together.

Posted by: visionbrkr | March 4, 2011 12:29 PM | Report abuse

Wait, a republican was caught actually trying to help poor people? With the evil guvmint?

Also, how come there's no mention how, despite his efforts, it still costs more per person for his program than with traditional Medicaid?

I've got a deal for republicans: if you think the private sector is the best at creating jobs, then how 'bout you guys stay in the private sector and leave the public sector up to people that actually believe in it?

Posted by: dplionis | March 4, 2011 12:33 PM | Report abuse

This is why I answered Mitch Daniels on your weekend poll asking which GOP politician we would least mind being President.

I don't want him to be President because he is, well, genuinely conservative. But he also seems like a wonky guy who wouldn't run our country into the ground and might actually provide some interesting, innovative policy ideas.

Posted by: madjoy | March 4, 2011 12:56 PM | Report abuse

Another telling sentence from the post:

"Health savings accounts are supposed to reduce dependence on government."

Really? I thought they were supposed to facilitate access to health care...

Posted by: Picaroon1 | March 4, 2011 1:16 PM | Report abuse


Actually, that's not what yesterday's post & charts said. The actuarial values mentioned were for high-deductible plans coupled with HSAs, not just the HSAs themselves.

It basically describes a plan like my own. It covers preventive care with a copay. All other care is subject to a $2400 deductible before coverage kicks in, which I think is pretty near the minimum allowed where you can still do the HSA. Like some other companies, mine seeds the HSA with about half the deductible as an incentive to use this plan (it gives them more stable, predictable costs). And the policy still costs about $15,000, and that in the large-group market.

The post was talking about this, not a barebones HSA.

Posted by: J-NC | March 4, 2011 1:28 PM | Report abuse


HSA's don't exist without HDHP's. Its kind of like the fact that you can't have a medicare supplement plan without the medicare you're supplementing.

The post above I assumed this fact was known. The HSA is just the funding mechanism to pay for claims that you're liable for in the HDHP whether it be funded by the employee or by the employer like yours is partially.

The fact that the policy still costs $15000 in the large group market has no bearing on much. Size doens't matter, claims and utilization does.

As far as minimums go here's a good link for that and yes the minimum for families is $2400 currently which again drives your premium.

If Daniels was a true heartless conservative he'd have given them a HDHP without the HSA component and in turn the approvals on it would drop like a stone.

Posted by: visionbrkr | March 4, 2011 1:42 PM | Report abuse

The Republican circular firing squad is taking shape.

Posted by: nickthap | March 4, 2011 1:49 PM | Report abuse

Another telling sentence from the post:

"Health savings accounts are supposed to reduce dependence on government."

Really? I thought they were supposed to facilitate access to health care...

THIS. +1.

Posted by: knoelle11 | March 4, 2011 3:42 PM | Report abuse

Sorry to break this to you, Ezra, but Mitch is your worst Leftist nightmare. Actually making a generous Medicaid program solvent with user taxes on a human behavior you want to discourage like smoking (as opposed to taxing work and productivity like your ilk does). Shocking. He runs with Marco as a VP and it's lights out for 16 years. Get used to it. You are an endangered species. Maybe you can find work at the student paper in Berkelely.

Posted by: saoirsemd | March 4, 2011 4:25 PM | Report abuse

Saorsemd, your troll is showing. If you were a real conservative, you would not want to see taxes raised on anything, even cigarettes, and would argue that in any case, taxes to shape behavior were social engineering.

But Ezra, you're right. When the right roots for policies to fail so that their ideology won't be contradicted, they have officially become the right-wing version of 1970's Soviets.

Posted by: ciocia1 | March 4, 2011 5:11 PM | Report abuse

If Mitch is as good as advertised, why was he such a dismal failure as Bush's budget guy? Mitch is just another corporate tool. Call him a wonk on the economy if you will, but he didn't get the nickname "the Blade" for nothing. How much more is the average American going to be willing to cut, and how much longer are they going to buy into this nonsense?

Posted by: rtinindiana | March 10, 2011 4:06 PM | Report abuse

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