When faced with the decision of whether to embrace Obamacare’s Medicaid expansion or stick to his party’s ideology in rejecting the health care law, Mike Pence did what several Republican governors have done: He swallowed his pride and took the money for his state.

But Donald Trump’s running mate decided to do it with a conservative twist: He added a litany of controversial rules and restrictions for how poor people in Indiana could qualify for the newly generous Medicaid coverage.


Pence pushed the program in a more conservative direction than any other governor who implemented Medicaid expansion, making Indiana a model for other red states — while also upsetting many conservatives who saw the move as a betrayal.

“Medicaid expansion proponents are satisfied with covering a vulnerable population with a program that is so deeply flawed. But I’m not,” Pence said in a May 2014 speech unveiling his plan at the conservative American Enterprise Institute. “Fortunately, Hoosiers have found a better way.”

Indiana’s rules for Medicaid expansion borrowed on ideas circulating in conservative policy realms for years. Indiana is the only state that is allowed to kick some low-income adults off their Medicaid coverage for six months if they don't pay premiums, and the program is based around health savings accounts favored by conservative health wonks.

But for the Obama administration, which approved those rules, it's still one more state in the expansion column. As reports came in Thursday that Trump would select Pence as his running mate, White House Press Secretary Josh Earnest praised Pence for “important work with the administration to expand Medicaid in his state."

The program in Indiana — known as the Healthy Indiana Plan 2.0 — is built on a smaller coverage program started by Pence's predecessor, Mitch Daniels. The expanded Medicaid program began last year and extends coverage to low-income adults up to 138 percent of the federal poverty level, or about $16,400 for an individual. About 345,000 Hoosiers were enrolled as of January.

Indiana's program requires beneficiaries to pay into health savings accounts. It's based on the conservative principle that people should have "skin in the game" as added incentive to stay healthy, and to discourage overuse of the health care system.

Medicaid isn’t the only aspect of Pence’s health care record that will get attention during the campaign. He has been a consistent abortion opponent, both as governor and during his six terms in the House. He began trying to defund Planned Parenthood in 2007, long before it became a top priority for most Republicans. And as governor, he signed one of the nation’s toughest abortion laws, which would have banned abortions, even in early pregnancy, based on the diagnosis of a fetal disability. A federal judge last month blocked that from taking effect.

The Indiana Medicaid model has caught the eye of other red states that didn't want to forego massive federal funding for expansion but are also reluctant to embrace a key portion of Obamacare. Most notably, Gov. Matt Bevin in neighboring Kentucky used Indiana’s approach to shape his own Medicaid expansion proposal that's now awaiting federal review.

Like many Republican governors who expanded Medicaid, Pence used linguistic gymnastics to reject the notion that his decision was an acquiescence to Obamacare. In an Indianapolis Star op-ed earlier this year, he argued that Healthy Indiana Plan 2.0 was an innovative state program and a "model for health care reform going forward."

"Obamacare is a deeply flawed law with its mandates, taxes and overreaches," he wrote. "Obamacare was never the right solution for Indiana or the nation, and it should be repealed."

Indiana joined other red states that have won federal approval for conservative-minded reforms in their Medicaid expansion programs. In Arkansas, for example, expansion enrollees are covered through federally subsidized private insurance plans instead of the traditional Medicaid program.

In many ways, though, Indiana's Medicaid approach went into uncharted territory for Medicaid. Enrollees earning above the poverty line could be locked out of coverage for six months for failing to make monthly payments, which could be as little as $1 depending on income. The state also charges co-pays as high as $25 for people who visit the emergency room inappropriately, and the program is exempt from a long-standing Medicaid policy to retroactively cover new enrollees' medical bills for up to three months before they applied for coverage.

Those policies have angered Obamacare advocates, who say they put too much of a financial burden on poor families and discourage them from signing up. The advocates are urging the Obama administration to carefully study these restrictions before letting other states adopt them.

But plenty of conservatives saw Pence's coverage expansion as a big-government entitlement for able-bodied adults, no matter how he tried to depict it as a responsible conservative solution.

"Pence touted his Indiana health plan as 'conservative,' but real conservatives panned it & the left loved it," longtime conservative health care policy expert Dean Clancy tweeted on Thursday.

Philip Klein, a conservative writer for the Washington Examiner, last year argued the expansion "should damage" Pence's prospects for the GOP nomination in 2016. Pence didn't end up running.

"But the bigger problem is that Pence's decision to expand Medicaid could give cover for other Republican governors to do the same," Klein wrote.

Almost a dozen Republican governors have expanded Medicaid since the Obamacare program started in 2014. That includes a finalist for Trump's running mate, New Jersey Gov. Chris Christie, and Ohio Gov. John Kasich. Both opted for the traditional Medicaid expansion without trying to win federal approval for coverage restrictions.

Nineteen states, including Florida and Texas, still haven't expanded Medicaid. Only two of the expansion holdout states are led by Democratic governors: Terry McAuliffe of Virginia and Jay Nixon of Missouri, who have faced resistance from their Republican-controlled state legislatures.

Pence two years ago aggressively lobbied the Obama administration to approve his expansion program. When federal review of his proposal dragged on for months, he asked President Barack Obama to meet with him to lock down approval.

Recently, Pence sparred with federal health officials over the way they are reviewing Indiana's Medicaid expansion model to determine whether it's hindering access to health care. Pence has accused the Obama administration of trying to undermine the program's success.

