WE'LL REFORM IT, NOT REPEAL IT:

The bill aims to provide affordable coverage for all through a series of tax credits and deductions designed to entice individuals into the insurance market with positive incentives, as opposed to Obamacare's solution of fining those who refuse to purchase health insurance. "It's a carrot instead of a two-by-four," Price says. "Regardless of where one fits in the economic spectrum, there is a financial incentive to purchase health coverage that the individual wants, not that the government forces them to buy."

The law would allow individuals to opt out of Medicare, Medicaid, and other federal health-care-benefit programs in favor of receiving a tax credit; an individual's health coverage would be "portable" -- no longer tied to an employer -- so losing a job wouldn't also mean losing insurance; individuals and small businesses would be able to access insurance pools that reduce risk for those with pre-existing conditions, and they could purchase plans across state lines. Tort reforms would cut down on physicians' practicing "defensive medicine" and driving up costs by ordering unnecessary procedures in an effort to avoid lawsuits.

Trump is expected to officially announce his selection of Verma and Republican U.S. Representative Tom Price, an orthopedic surgeon who he will nominate to be secretary of health and human services, casting them as his "dream team" whose job will be to transform the U.S. healthcare system, the official said.

Charging poor people small premiums or fees for care -- long favored by conservatives who contend that "skin in the game" engages patients in their health -- has historically produced mixed results. [...]

Health and Human Services Secretary Sylvia Mathews Burwell said the Obama administration, which must sign off on new cost-sharing requirements, was open to more proposals from Republican governors. "We welcome the conversation," she said, calling Indiana's Medicaid plan "a big deal and a very important deal."

The stakes in these discussions are high. Medicaid now provides coverage to nearly 1 in 4 Americans at an annual cost to taxpayers of more than $500 billion.

The program is growing rapidly, thanks largely to the 2010 healthcare law, which provides federal aid to states to expand Medicaid to low-income, working-age adults. (Medicaid historically served poor children, mothers and the disabled.)

Though the coverage has provided a vital safety net, Medicaid faces challenges. Patients often fare worse than privately insured Americans. And 21 states, mostly in the South and interior West, have refused to expand their programs, citing concerns about Medicaid's effectiveness and cost.

"For us to be honest, we have to say that the Medicaid program is ... in need of fixing," said Vernita Todd, chief executive of Heart City Health Center, which operates two clinics in Elkhart serving patients who are uninsured or on Medicaid.

Todd, like many officials who work with Medicaid, has labored to get patients to checkups and other preventive care. "What we have learned is that our Medicaid population is not really very health-literate," she said.

For years, states have tried to nudge patients to make better choices. One strategy has been to make Medicaid look more like private insurance, charging premiums, co-pays and penalties for emergency room visits.

But billing poor patients, even in small amounts, often drives them from the doctor's office, studies show. [...]

Instead of premiums, the Healthy Indiana Plan requires patients to contribute to a health savings account used for their medical expenses. Monthly contributions, based on income, range from $1 to $27.

If patients make the contributions, medical care is essentially free. People can even lower their contributions by getting recommended preventive care, such as cancer screenings.

If patients don't contribute, they lose dental and vision coverage and must pay up to $8 to see a doctor or fill a prescription.

"The Healthy Indiana Plan ... is aspirational," said Brian Neale, the governor's health policy director. "We believe that individuals, if offered the opportunity, will make the right choices."

As of July 1, more than 297,000 people had enrolled; about 72% were making the required contributions, according to the state.

At Heart City Health Center, a squat brick building across the street from a factory, sign-ups have been brisk.

Joyner, who waited tables for more 40 years before her legs gave out two years ago, called the new coverage "a godsend."

"When you get older, you start to fall apart," she said. "I worked hard all my life, but I didn't expect any of these health problems until I was in my 80s.... Now I don't have to worry."

Once dependent on charity care at a local hospital, she can now get regular attention for her rheumatoid arthritis and a painful nerve condition in her legs. The $12.33 contribution is a small price to pay, even on her $633 monthly Social Security check, she said.

"The people who need care are not demanding that it be totally free," said Todd, the clinic director. "It takes away people's dignity."

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