One of the most interesting developments in health care reform is a a consumer-driven plan developed in Indiania by Governor Mitch Daniels.  It could be a model for the country (but I’m going to tell you why it won’t be).

An excellent piece in City Journal describes the creation of the plan:

 “We went through four or five complete iterations of program proposals until we hit on what became the Healthy Indiana Plan,” or HIP [said Mitch Roob, then the secretary of Indiana’s Family and Social Services Administration]. The plan had three core principles. One of these, again, was individual control of health-care spending. A second was protection for taxpayers; the program was designed so that enrollment couldn’t grow faster than the available funding. (The program is funded partly by diverting current Medicaid DSH funding-which required a waiver from the federal Department of Health and Human Services, the Medicaid program’s overseer-and partly by a cigarette-tax increase.) The third was disease prevention: Daniels, who exercises and watches his own diet, was adamant that HIP focus on wellness instead of just paying bills.

 Although the plan is popular and seems to be succeeding, it is in limbo and threatened with extinction. The problem: The administration’s health care plan may kill HIP by requiring citizens presently served by it to enroll in Medicaid. It’s a shame that this possibility looms, and, as Paul Howard, a healthcare analyst at the Manhattan Institute points out, the Indiana experiment was doing exactly what states should do in a federal system:

A key part of American federalism is states’ ability to serve as laboratories where the consequences of various programs can be explored without committing the entire nation to what may turn out to be expensive blunders. For instance, Wisconsin successfully took the lead on welfare reform in the early 1990s, setting the template for national bipartisan legislation in 1996 that lifted millions of women and children out of poverty. But in health-care reform, President Obama and congressional Democrats didn’t wait for state experiments to run their course. State reform efforts-on the left and right-were still in their earliest stages in March 2010, when Congress passed the Patient Protection and Affordable Care Act, committing the nation to trillions of dollars of new health-care spending. The consequences of this rush to national reform could be dire.

 Another laboratory, Howard notes, is Massachusetts, where a reform very similar to the national plan was launched. It’s a disaster-but nobody in the administration is willing to act on these lab results.