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IU Law Professor: Indiana Should Expand Medicaid

Doctors and graduate students participate in an educational internal medicine training program.

An Indiana University McKinney School of Law professor says it would be foolish for Indiana not to expand its Medicaid program under the Affordable Care Act, at least for a few years.

The Affordable Care Act allows states to extend Medicaid eligibility to those earning 138 percent of the federal poverty level.  For the first three years, the federal government would pay for 100 percent of the expansion for the first three years and 90 percent after that.

Professor David Orentlicher says he would be shocked if Indiana did not expand the program for at least the first three years.

“The federal government has said you can try it out for a few years and then decide,” he says. “So you can do the three years at one hundred percent and then decide.  A free trial?  That sounds pretty good.”

Still, there are other costs associated with the Affordable Care Act, such as the so-called “woodwork” effect: thousands of currently uncovered Hoosiers eligible for regular Medicaid who will enroll after the Affordable Care Act takes effect. Orentlicher says regular Medicaid enrollees would not be subject to the same federal funding match as those under the expansion.

“If there’s an argument about unaffordability, the argument has to be, though we don’t have to worry about the Medicaid expansion until 2017 and even though it’s this great match, the woodwork effect is going to make that unaffordable,” he says.

Orentlicher says it could also be difficult to expand Medicaid to more Hoosiers for three years only to drop their coverage when the state has to start bearing some of the cost. Republican lawmakers say they will likely take a wait-and-see approach, holding off a decision on Medicaid expansion as they see how other states handle the issue.

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