Reimbursement rates to hospitals were cut 5 percent in 2010. The state plans to restoring 2 percent of those cuts next year.
House Ways and Means Chair Tim Brown says he will not advance a bill addressing implementation of the Affordable Care Act.
Republican leaders say uncertainty about the financial burden placed on the state by Medicaid expansion likely eliminates that option.
Governor Mike Pence says he is not pursuing healthcare expansion under the Affordable Care Act through the Medicaid program.
The bill directs the state to continue negotiations with the federal government, seeking a way to compromise on Medicaid expansion.
Rep. Ed DeLaney's proposal would have expanded Medicaid if the federal government did not approve the state's request to use the Healthy Indiana Plan.
Legislators considered a state constitutional amendment on hunting and fishing and a bill creating the Indiana Career Council and debated expanding Medicaid.
The budget proposed Friday does not include money for Medicaid expansion in Indiana.
David Orentlicher says Indiana should expand Medicaid because the federal government would bear most of the cost.
State officials are still waiting to find out how the federal health care law will affect Indiana‘s own health plan for the uninsured.