We sponsored a luncheon on last Monday featuring Indiana Gov. Mitch Daniels, who described to senior journalists and health policy experts his novel plan to increase access to health insurance for the uninsured through a program modeled on Health Savings Accounts.

His plan is designed to help up to 132,000 uninsured Hoosiers earning less than about $20,000 a year with health insurance, preventive care, and a funded health spending account.

The plan starts with a POWER account. The uninsured person would make a contribution, on a sliding income scale, to his or her account, with the contribution ranging from about $200 a year for those making $10,000 to about $900 a year for those earning $20,000. The state would top-off the account to bring it up to $1,100.

People would spend this money first on health care, then private health insurance, paid by the state, triggers in. There are added incentives for people to use preventive care, which, like HSAs, doesn't come out of the account.

And like HSAs, people would be able to rollover any money left in their account at the end of the year. This is indeed a consumer-friendly public program.

Gov. Daniels has taken the heat to raise the state's cigarette tax by 44 cents to pay for the plan. And now he is having to fight the Washington bureaucracy to get approval to implement it.

The reasons get into the arcane nature of Washington budgeting over the Medicaid money he needs to partially fund the program. Gov. Daniels expressed his frustrations about trying to do the right thing: Balance his state's budget (which he has done two years in a row), keep Medicaid spending in check, and pass ground-breaking legislation with bi-partisan support to provide a consumer-friendly option for the uninsured.

And now he is being penalized by the Office of Management and Budget -- the very agency he ran before being elected governor of Indiana in 2004 -- for keeping his Medicaid spending down.

States have incentives to spend as much as possible on Medicaid to draw down the maximum number of federal dollars. But here we have a responsible governor who didn't do that and who comes up with a creative plan that is fiscally responsible, yet the OMB could block him from trying something new. OMB says that Indiana's spending rate was too low in the past to approve the new program.

Gov. Daniels could be a leader in showing the other states a new way to cover the uninsured rather than using onerous individual mandates, massive new regulatory bureaucracies, and big tax hikes. But he won't have the chance if Washington puts on the brakes.

And we wonder why nothing ever changes here.