A committee approved the Senate GOP’s plan to overhaul Indiana’s Medicaid expansion program Thursday. The Senate Appropriations Committee removed the lifetime eligibility limit from the bill.
Senate Bill 2 still makes major changes to the Healthy Indiana Plan, or HIP. That includes reintroducing Indiana's previously halted work requirements and an enrollment cap.
Sen. Chris Garten (R-Charlestown) said the committee amended the language to offer the Indiana Family and Social Services Administration some flexibility on the enrollment cap.
“We're stating our legislative intent of wanting a cap of 500,000, but we're also recognizing that the federal government may say differently or may rule differently,” Garten said. “We're giving the secretary that flexibility with that provision.”
There are more than 680,000 people currently enrolled in the HIP program.
Garten said the bill addresses the growth of Medicaid in the state budget, especially following the 2023 Medicaid forecasting error.
However, Indiana's general fund doesn’t pay for HIP. In fact, 90 percent of HIP is funded by the federal government and the rest is covered by a combination of a fee Indiana hospitals pay and cigarette taxes.
Following the 2023 Medicaid forecasting error, FSSA began releasing monthly Medicaid financial reports with commentary to explain what the reports meant. Those reports said that, even when HIP enrollment is higher than expected, it does not “impact the state’s general fund.”
Senate President Pro Tem Rodric Bray (R-Martinsville) said the legislation makes sure HIP won't overshadow other programs.
"You could find that continuing to expand, where all of a sudden we don't have funds to—to run the HIP program itself, because we've run out, because it's gotten too expensive," Bray said.
Bray said, as the federal government discusses Medicaid spending, SB 2 also gives Indiana some more flexibility in how it reacts to any potential cuts.
Currently, Indiana has what is known as a "trigger law" written into HIP statute. This means that if federal funding for Medicaid expansion drops below 90 percent, that program would automatically start to unwind.
SB 2 changes that language to a "may" provision, meaning if the federal government drops to 85 percent or 70 percent Indiana can decide what it wants to do.
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But, Bray said that would be a big change the state of Indiana.
"We've got to be thinking about that, and try and be prepared for that eventuality — if it comes," Bray said. "In one way, I get it. The federal government needs to try and rein in its costs, and so I can't be the first person to complain that they're trying to do so. But we just need to be able to be prepared if that eventuality happens."
Sen. Fady Qaddoura (D-Indianapolis) said if there are fiscal concerns around Medicaid, those changes should wait until after the April Medicaid forecast is shared with the State Budget Committee.
“We are sending a message that your medical conditions, your health care, when it comes to—to the—to the dollars versus your health care, we're going to put more emphasis on the fiscal issue,” Qaddoura said.
Qaddoura said the state has enough money to account for the growth of Medicaid as well.
Sen. Ryan Mishler (R-Mishawka) said Medicaid members would likely qualify for other Medicaid programs or find coverage on the federal Health Insurance Marketplace. He claimed Medicaid members who go on the exchange would likely qualify — based on their income level — for the federal government to pay the premium.
The subsidies offered in the marketplace aren’t offered to people below the federal poverty line. That means the federal government wouldn’t pay the premium for anyone who could lose access to HIP under the federal poverty line, which is a large portion of those at risk.
The amendment to the bill also codifies a recent administrative change to halt advertisements for Medicaid. The change was implemented by Gov. Mike Braun’s administration following the beginning of his term in January.
The committee did not make any changes to a section of the bill on presumptive Medicaid eligibility standards for hospitals. The goal of presumptive eligibility is to make sure people who appear to be Medicaid-eligible have immediate access to health care by providing short-term health coverage.
During public testimony, representatives from hospitals raised concerns that the standards set by the bill are too strict and difficult to meet.
The bill now moves to the full Senate.
Abigail is our health reporter. Contact them at aruhman@wboi.org.