Republican proposal would upend a healthcare system in Indiana that covers many low-income people – in a program that Mike Pence put in place

Janice Phelps, a 60-year-old disabled factory worker in Evansville, Indiana, knows how expensive healthcare is.

Each month, shots for her severe asthma cost $3,000. Quarterly injections for knee pain cost $3,200. Medication for depression costs $900. She has had seven back surgeries, two shoulder surgeries, and two knee surgeries since 1985. The largest public health programs in America – Medicaid and Medicare, which aid the poor and the elderly – paid for nearly all of it.

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Yet those programs are now threatened by the men she voted for: Donald Trump and former Indiana governor Mike Pence.

“I’m all in favor of repealing it,” she said about Republicans’ push to do away with the Affordable Care Act (ACA), popularly known as Obamacare. But, she said, when you talk about cutting Medicaid: “I don’t agree with that at all.”

Dramatic changes to Medicaid – the scheme to help poorer Americans get healthcare – are just part of the reforms in a Republican bill leaders are trying to force through Congress at lightning speed. However, since it was introduced last Monday, the American Health Care Act has met opposition from the left, significant sections of the Republican party, and a slate of doctor, hospital and patient associations. It’s been called a “legislative orphan appealing to no one”.

Though Phelps said she would support Trump even if it passed, she is upset by the idea of Medicaid cuts.

“For Medicaid to say, ‘We’re going to spend X amount of dollars on you, and that’s all we’re going to spend’ – we’re supposed to just roll over and die because we can’t pay it ourselves?” she said. “X-rays, and MRIs, and CT scans, surgeries and stuff – we have no control over how much that is ... I would not be able to pay that out of my pocket, and I have to pay that to live ... to put a cap on it is uncalled for.”

We’re supposed to just roll over and die because we can’t pay it ourselves? Janice Phelps

Anxiety and ambivalence about health are common in this part of Trump country. The city of Evansville is the seat of rural Vanderburgh in deep red Indiana. It lies at a bend in the Ohio river, just north of Henderson, Kentucky.

This is Pence’s home state. When he was governor, he took political advantage of the ACA and used federal funds it made available to provide healthcare for half a million of the poorest people in his state.

Of course, while helping Trump win the White House, Pence was an implacable opponent of the healthcare law. By February this year, he was whipping up a crowd of conservatives, telling them “Obamacare must go”. He revived that line while pushing for the Republican bill in Louisville, Kentucky, this weekend.

“In a word, we’re going to make the best healthcare system in the world even better,” Pence said.

Yet here, in a rural corner of Indiana where Trump won 40,000 votes to comfortably beat Hillary Clinton by 10,000, many low-income people are covered by a program Pence put in place only two years ago and which Republican proposals would severely cut.

Pence’s program, called HIP 2.0, is part of Medicaid. It is funded by the ACA, the law that Pence continues to lobby against. Including Medicaid, more than one in three people use government health coverage in Indiana.

Why is healthcare so expensive in the USA? It’s the prices. That’s not a joke. Drugs, diagnostics, medical devices, doctor visits, hospital visits, procedures, scans, surgeries – “the United States spends more on health care than any of the other OECD countries spend, without providing more services than the other countries do ​, ​”, according to a widely cited 2003 paper on the topic entitled It’s the Prices, Stupid. Why are prices so high? In short, lack of a national system. The US system is employer-based, with most Americans – about 150 million non-elderly people – getting insurance through their employers, instead of straight from Washington. No national system means there is no single authority – no single payer – to go to bat on behalf of the consumer, although the big public healthcare programs, Medicare and Medicaid, do negotiate with providers on some costs. US healthcare providers can therefore get away with charging more, as can medical device manufacturers and drug makers. Doctors can order more tests, ambulances can charge more for transport and, on the other side, insurance companies can put up stronger resistance to paying claims, or charge more for coverage. The enormous inefficiency of the system is itself costly, as all sides have to spend money on analysts and lawyers and bookkeepers and anxiety medication. Why can’t market forces resolve the problem? Because it’s a highly irregular market, with highly localized supply and demand, instantly fluctuating demand (from no-need to need-now-at-any-price) and high barriers to entry for would-be suppliers of insurance, pharmaceuticals, or care itself. Tom McCarthy

Vanderburgh is one of only two Indiana counties where more than 10,000 people are on HIP 2.0 and that voted for Trump. Obamacare expanded Medicaid coverage to single adults through state programs such as HIP 2.0, a change that insured 500,000 new people statewide, and 14.4 million people nationally. All told, Medicaid programs cover 1.4 million people in Indiana and 73 million Americans.

Republican proposals would upend that system. First, funding for programs such as HIP 2.0 would start to dissipate by 2020. At that point, the federal government would stop paying for anyone who dropped off HIP 2.0 rolls. Republicans would also cut traditional Medicaid by ending some guaranteed benefits, leaving states such as Indiana with a tab they can scarcely afford – and residents facing high anxiety.

“If it wasn’t for Medicare and Medicaid, I wouldn’t even be sitting here today,” said Fred Cook, an Evansville man and Clinton voter whose teaching career was ended by heart disease. He had open heart surgery – a triple bypass – and a double leg amputation, in part caused by his longtime habit of smoking Kools. “I weighed 438 pounds.” Fred had to be weighed in a bed, he said.

Facebook Twitter Pinterest Fred Cook: ‘If it wasn’t for Medicare and Medicaid, I wouldn’t even be sitting here today.’ Photograph: Justin Gilliland/The Guardian

“We live in fear,” said Pam Martin, a retiree and Clinton voter who cares for her mentally disabled brother, Darrell Martin. Though Darrell has a job, he earned only $11,000 per year, which left him in a healthcare purgatory until Pence approved HIP 2.0.



“His coverage is really good, and we’re really scared it’s going to go away,” Martin said. On Monday, her family must decide whether to rush an expensive eye surgery while her brother still has coverage, or wait for vision to return to his right eye, as doctors recommended.



Pence’s mission to undo what one Indiana lawmaker called his “single most significant achievement” is part of what House speaker Paul Ryan called a “united Republican government” push to repeal the ACA.



For seven years, House Republicans sought to repeal the law and voted more than 50 times to send the Senate bills that would never become law. Now, though, with control of the government, Republicans have a chance to repeal the act but are split over the plan put before them.

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Ideological conservatives who believe the bill does not go far enough to repeal have dubbed it “Obamacare lite”. Leaders of the left called it “fundamentally cruel”. The bill is being pushed through congressional committees but seems to have little chance of gaining the votes to pass through the House and Senate to reach Trump’s desk. Yet Trump is in “full sell mode”, seeking to woo and cajole, even inviting his former presidential nomination rival, Ted Cruz, to dinner and conservative House members for pizza and bowling at the White House.

The Congressional Budget Office, which studies all bills, is expected to release an analysis of the bill on Monday, estimating how much it would cost and how many Americans might lose insurance – outside experts have predicted between 6 million and 15 million people will be hit.

The ACA helped insure 20m Americans, bringing the rate of uninsured people to a historic low. While the majority of Americans, 155m people, receive health benefits through their employer, 21m more buy their own insurance.

Government insurance is also widespread. In 2016, 73m people used Medicaid. Almost half of all births nationally are financed by the program. Another 43m people use Medicare, a system for the elderly that is America’s closest equivalent to the UK’s National Health Service. For the 28 million Americans who remain uninsured, a hospital visit or prescription can easily rack up thousands in medical bills.

Cindy Rosser, a 46-year-old mother of five and grandmother of one, manages two dry cleaning locations and uses HIP 2.0 for insurance. After being laid off in 2015 (she was told the company could not afford workers’ health costs), she discovered a pre-cancer in her esophagus and her 11-year-old adopted son was diagnosed with schizophrenia.

Facebook Twitter Pinterest Cindy Rosser: ‘We need to have some kind of affordable insurance for working people, because even if you get it through a job it costs an arm and a leg.’ Photograph: Justin Gilliland/The Guardian

Rosser did not vote, but she is now anxious about the future of healthcare. “We need to have some kind of affordable insurance for working people, because even if you get it through a job it costs an arm and a leg.”

Some conservatives see dependency on government funding as a form of malign socialism but then experience how urgent a safety net can be.

“I’ve heard from a lot of constituents who find themselves conflicted,” said Ed Clere, a Republican Indiana state representative. “Then, they find themselves in a situation where they know someone who is benefitting from it, or they themselves benefit from it.

“That’s part of the irony, because the legislation that [Pence] is now pushing in Congress in his role as vice-president threatens to undermine and ultimately undo his biggest accomplishment as governor,” Clere said.

Few know the benefits and flaws of the ACA better than Matthew Frankic, an Evansville insurance broker. Each day, his job is to sign people up for it. He started in 2010, before the law took full effect, when a sick person could easily pay $1,200 per month for insurance, Frankic said.



“What I saw was a tremendous amount of people become eligible for insurance,” Frankic said. He has also “seen it hurt a lot of people” hit with fines for failing to get insurance.

When it came time for Frankic to pick a president, between Clinton, who did not campaign in his town at all, and another who campaigned to repeal the health law, he picked Trump.

“How do you vote for either party when you don’t like either of them?”