Indiana's decision not to expand Medicaid has proved costly, not only in terms of missed federal dollars but also for patients who didn't receive the care they could have had Indiana expanded Medicaid under federal terms.
Under the Affordable Care Act, Medicaid would be expanded to include residents with incomes up to 138 percent of the federal poverty level.
Instead, Gov. Mike Pence prefers to push for federal approval of his plan to expand the Healthy Indiana Plan. It is a slow, torturous and uncertain route.
Pence's plan, now in its second incarnation, continues to slog its way through the approval process. Last month, the Centers for Medicare and Medicaid Services rejected the state's application because it lacked input from the Pokagon Band of Potawatomi Indiana.
There is no deadline for a federal decision on Indiana's application, but the Pence administration hopes to select a marketing company Sept. 12 to run an eight-month promotional campaign beginning in January for the Healthy Indiana Plan 2.0.
Pence's zeal for his HIP 2.0 proposal is understandable, given his ideological leanings.
But while Indiana continues to push for an alternative approach to helping the uninsured, it isn't getting the traction that would have come from expanding Medicaid under the Obamacare terms.
The percentage of uninsured Hoosiers has barely budged, from 15.3 percent in 2013 to 15 percent in midyear 2014, according to Gallup.
By contrast, Illinois embraced Obamacare and expanded Medicaid under the generous terms set out by the Affordable Care Act. In that same period, the percentage of uninsured residents in Illinois fell from 15.5 — almost the same as in Indiana — to 12.3.
Inaction would be inexcusable. In July, Indiana cut off enrollment in the existing Healthy Indiana Plan for lack of state funding.
Already, Indiana has missed out on more than $1 billion in federal funds that could have come from expanding Medicaid. And if the feds approve Pence's HIP 2.0 plan, it will cost Indiana $365 million in the first year alone compared to Medicaid expansion. That number comes from the state's fiscal analysis, not from the Obama administration.
And the federal terms are generous. The federal government would pay the entire cost of the expanded coverage through 2016, with the federal share gradually falling to 90 percent thereafter. The federal share is 67 percent for Hoosiers currently eligible for Medicaid under the original terms.
Pence has called Medicaid a "broken" program and has urged Congress to repeal the Affordable Care Act. He is promoting his high-deductible HIP 2.0 plan as an alternative that encourages consumer responsibility in making health care decisions.
But without federal approval, Pence's proposal remains a policy plan, not an insurance plan.
Approving HIP 2.0 would be better than nothing, but expanding Medicaid under the federal terms would be better.