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Medicaid Expansion Could Cost Indiana $2.6 Billion

By Brandon Smith

Posted September 19, 2012

New state estimates predict Indiana's Medicaid costs will increase between around $600 million and $2.6 billion over a seven year period once the Affordable Care Act goes into effect.

The wide difference in potential cost calculated by Milliman Incorporated, the state's actuary, is based on whether the state decides to expand Medicaid. If the state does not expand the health care program, it will still see an increase of $612 million.

If full expansion occurs, it would cost $2.6 billion, but Milliman Consulting actuary Robert Damler says that figure is based on full participation.

"We don't believe that a full participation will occur; it's more of an end point estimate," he says. "We are comfortable with our best estimate, which is the $2.1 billion estimate."

Health care consultant Seema Verma is leading Indiana's ACA implementation. She says the state hasn't made a decision on whether to expand Medicaid. She says that will be up to the next governor and legislature. And Verma says much of the uncertainty revolves around the Healthy Indiana Plan, a state-run health care program for uninsured Hoosiers.

Indiana wants to use HIP for its Medicaid expansion, but the federal government has only granted a one-year extension to the program.

"We don't know whether, leaving aside the whole Medicaid expansion, is whether they'll even let a HIP program, what we have today, whether they'll just even let that continue at our regular match rates," Verma says.

The state requires enrollees to contribute to HIP. Verma says whether the federal government will allow that with the new plan is still a point of contention

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