Indiana Senate Passes Medicaid Reforms

The Indiana Senate has passed a bill that could remove over 250,000 people from the state's Medicaid program. The plan is a response to last year's sudden billion-dollar funding shortfall and years of warnings about the financial sustainability of the state's Medicaid rolls.

Senate Appropriations Committee Chairman Ryan Mishler, R-Mishawaka, said that the Healthy Indiana Plan (HIP) now has over 700,000 participants, compared to 390,000 before the COVID-19 pandemic and 40,000 when the program was first launched in 2006. HIP is for non-disabled adults ages 19-64 with individual incomes of up to $20,793, or $43,056 for a family of four.

Mishler said lawmakers already have to make changes due to a recent court order. He also stated that enrollment in the state's Medicaid programs is increasing at a faster rate than the state's revenue growth.

“You’re going to see, when we do the budget, Medicaid and (the Department of Child Services) are going to suck up most of our revenue and we’re not going to have much left over to do other programs,” he said. “If we do nothing, many of our other programs are going to suffer and the largest will be K-12.”

The bill caps enrollment in HIP at 500,000 and requires program users to spend at least 20 hours per week either working, taking part in a work program or volunteering. Exceptions are provided for people enrolled in a substance abuse treatment or rehabilitation program, parents or caretakers caring for children with serious medical disabilities or people who are certified as physically or mentally unfit for employment. Mishler said the work requirement alone should bring HIP enrollment below 500,000.

Senate Democrats did not dispute the potential for a funding crisis but wondered if there were other ways to fix the problem. Sen. Fady Qaddoura, D-Indianapolis, said that the bill appears built on the assumption that 300,000 people signed up for Medicaid who did not truly need it. He suggested analyzing the needs of Medicaid enrollees to see which HIP users are able to fend for themselves.

“What the bill does is effectively ending Medicaid expansion in the state of Indiana as we know it today,” he said. “Instead of pushing 300,000 people out of the program, I would be much more comfortable going through the details of the program to know who deserves, based on health conditions and financial status, to stay on the program.”

Mishler said that the changes to HIP under the bill wouldn’t mean people would be without any options. He said enrollees removed from HIP could enroll in a different program or use the federal health insurance exchange.

The bill passed the Senate on a party-line vote of 40-9 and now goes to the House.