The Senate GOP’s overhaul of Indiana's Medicaid expansion program received final approval from lawmakers Thursday. The legislation now heads to the governor’s desk — despite concerns it could result in people losing coverage.
Lawmakers said their main focus with Senate Enrolled Act 2 was “right-sizing” the Healthy Indiana Plan, or HIP. Among other things, SEA 2 reintroduces Indiana’s previously halted work reporting requirements.
Sen. Chris Garten (R-Charleston) said the legislation ensures Medicaid funding goes to people who are eligible for it. He said the bill outlines 12 exceptions for the work reporting requirements.
“It was mentioned that the majority of HIP members already work,” Garten said. “Well, friends, if they work, this bill doesn't affect them.”
But Medicaid experts said work reporting requirements lead to people losing coverage, even if they meet the requirements. One expert said the requirements don’t encourage more workforce participation, they require additional paperwork for something Medicaid members are likely already doing.
And a majority of people in Medicaid expansion programs have jobs — with 44 percent working full-time and 20 percent working part-time.
The loss of coverage isn’t the only concern that Medicaid experts and advocates have with work reporting requirements.
Sen. Shelli Yoder (D-Bloomington) said the policy will increase administrative costs — which is supported by the bill’s fiscal analysis.
“Work reporting requirements do waste our taxpayer dollars,” Yoder said. “It leads to members being kicked off of their coverage, and actually doesn't decrease our Medicaid costs.”
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Several other controversial policies were removed from the bill through the legislative process.
However, Sen. Fady Qaddoura (D-Indianapolis) said some of the policy goals that were attached to those ideas are still in the bill. For example, the bill originally included a 500,000-person enrollment cap, which was removed by the House health committee. Qaddoura said the bill still places a cap on HIP enrollment.
“[The House] replaced it with a new cap,” Qaddoura said. “That new cap is the word appropriation.”
The bill requires the Family and Social Services Administration secretary to limit enrollment based on how many people can be covered by the funding sources available for the plan. The FSSA secretary is responsible for ensuring that “financial participation” doesn’t exceed state appropriations or other funding.
“This policy goal of capping Medicaid enrollment based on appropriations ties directly with the other conversations that we had with the policy of the underlying bill — which started with capping enrollment, prohibiting advertisement and other policy ideas,” Qaddoura said.
Even with higher than expected enrollment, the HIP program has yet to exceed its funding sources, according to FSSA’s monthly financial reporting. For example, in May 2024, actual HIP enrollment was more than 95,000 people higher than expected. But FSSA’s monthly report commentary said the enrollment had no effect on the state budget.
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Indiana is responsible for 10 percent of the cost of the HIP program, but it doesn’t actually pay that cost. Instead, 90 percent of the state’s portion is covered by a fee paid by hospitals and the rest is covered by cigarette taxes. HIP has yet to need more funding than is available through those sources.
There is language in another piece of legislation, House Bill 1004, that changes how HIP is funded, but not in a way that would decrease the amount.
FSSA officials and Republican lawmakers said the bill introduces the next iteration of the HIP program — HIP 3.0.
Under SEA 2, lawmakers give Indiana more control over HIP by directing the FSSA secretary to convert the program to a state-controlled plan — which also could mean a lower federal match.
Qaddoura said this gives the state control over enrollment, eligibility and the ability to experiment within the program without having to follow the “minimum requirements” of a typical expansion program.
“What the underlying bill does is effectively it kills the Medicaid expansion in the state of Indiana,” Qaddoura said. “That's what the bill does.”
Qaddoura said he’s concerned this will result in lawsuits against the state.
SEA 2 also includes several other policy changes that affect Indiana Medicaid programs, such as codifying the Braun administration's Medicaid marketing ban, changing presumptive eligibility standards for hospitals and increasing eligibility monitoring.
Abigail is our health reporter. Contact them at aruhman@wboi.org.