Senate Bill 2 reintroduces Indiana's previously halted work requirements and limits enrollment to 500,000 people — with some flexibility based on federal Medicaid policy. That’s nearly 200,000 people less than current enrollment.
(Lauren Chapman)
Indiana lawmakers want to address rising Medicaid costs in the state budget by overhauling its Medicaid expansion program. The Senate approved legislation that would make several significant changes to the Healthy Indiana Plan, or HIP.
Federal funds pay for 90 percent of HIP. This leaves the state of Indiana responsible for 10 percent of the program. However, the state actually doesn’t cover that cost. The rest is covered by a fee on Indiana hospitals and cigarette taxes — meaning HIP isn’t funded by the state budget.
But, lawmakers said enrollment in the program remained too high following the end of the COVID-19 public health emergency, with current enrollment close to 700,000 people.
Lawmakers said decreasing enrollment could redirect that funding to other programs.
The author of Senate Bill 2, Sen. Ryan Mishler (R-Mishawaka) said the bill is about “right-sizing” the program.
“Medicaid's a big issue, and this is just a start,” Mishler said. “There's a lot more work to do. Medicaid's grown by $5 billion over the last four years.”
SB 2 reintroduces Indiana's previously halted work requirements and limits enrollment to 500,000 people — with some flexibility based on federal Medicaid policy.
That’s nearly 200,000 people less than current enrollment.
Mishler said the program has outgrown what it was originally intended to be. However, in 2014, when Indiana filed an application for the program, FSSA said the program would be targeting 559,000 “non-disabled adults” between the ages of 19 and 64.
The program is not limited to single or childless adults, despite Mishler's repeated claims that it is.
Sen. Shelli Yoder (D-Bloomington) said this legislation could “threaten” the health and economic stability of Indiana.
“As it currently stands, the bill — under the guise of fiscal responsibility — could result in working Hoosiers and rural hospitals being harmed the most,” Yoder said.
The fiscal note for the bill said the revenue for locally owned hospitals may be reduced and there may be an increase in bad debt or charity care.
Yoder said she's concerned this could lead to hospitals closing due to economic impacts.
"We have 17 counties who do not have a hospital," Yoder said. "My concern is this is going to put even more strain on our current local hospital system."
Hospitals in Indiana pay a fee, similar to a tax, called a Hospital Assessment Fee. That funds 90 percent of the state’s portion of the HIP program. Cigarette taxes cover the other 1 percent.
Yoder said SB 2 increase barriers to access and punishes hospitals for providing care to Hoosiers who need it. She also pointed out that the fiscal note indicates the policies in SB 2 will lead to increased administrative costs for the state — Mishler's response was that the savings from SB 2 would out weigh the increased administrative costs.
"It's designed to make it harder for people to access care — so that we can claim a savings that perhaps doesn't even exist," Yoder said. "We don't even know what the fiscal analysis really is before we vote on Senate Bill 2."
Mishler said if Indiana can cut costs to this program, then the Hospital Assessment Fee fund and cigarette taxes could be used to address issues like the waitlists for Medicaid waiver services. However, the bill's fiscal note does state that Indiana will collect less in fees from hospitals as a result of fewer people being enrolled in HIP.
