Senate Republicans approve limits on health insurance program

INDIANAPOLIS — Republican senators unanimously approved a bill to impose various Medicaid restrictions like work requirements on an insurance program for moderate-income Hoosiers between the ages of 19 and 64.

Another provision would cap the program – meaning hundreds of thousands of Hoosiers could lose coverage.

Sen. Ryan Mishler, the chief budget architect for Senate Republicans, pitched Senate Bill 2 as one to "right size" Medicaid, which is the fastest-growing portion of the state budget.

"We have to change the plan because it grew. So we don't have a choice," said Mishler, R-Mishawaka.

Over the last four years, costs for Medicaid – of which the federal government pays roughly two-thirds – have grown by $5 billion and outpaced revenue growth, he said.

"You're going to see that when we do the budget that Medicaid and (the Department of Child Services) are going to suck up most of our revenue and we're not going to have a lot left to do other programs," Mishler warned.

Enrollment in the Healthy Indiana Plan, which covers moderate-income adults, has nearly doubled from 390,000 pre-COVID to more than 750,000 in January.

Senate Democrats universally opposed the measure, which moved to the House on a 40-9 vote.

Sen. Fady Qaddoura, D-Indianapolis, said the bill would limit the number of qualified Hoosiers who might benefit from the program.

"We're effectively killing the Medicaid expansion in Indiana as allowed under federal law," Qaddoura said.

Bill details

Mishler told reporters that the bill was more of a "directive" for the Family and Social Services Administration, which oversees Medicaid. Any changes to how the state administers the program must get federal approval.

The Trump administration has previously targeted Medicaid for scrutiny, though across-the-board cuts would be tougher to advance than a targeted look at the expansion programs like HIP.

Indiana's Medicaid expansion for HIP occurred under then-Gov. Mike Pence in 2015.

Mishler said the state needed to get HIP "back under our control" by moving the program from the state's Medicaid plan onto a Medicaid waiver. The latter grants the state more autonomy over decision-making like eligibility and covered services.

The federal government currently pays for 90 percent of costs for HIP – but Mishler noted that funding could be jeopardized and leave Indiana on the hook.

"If the feds change to (a) 70-30 (split), we can't get out of it. We're stuck the way it stands now," Mishler said.

A trigger law for the program wouldn't apply because it was an entitlement under the state's Medicaid plan and not a waiver, he said.

Other provisions of the bill would bar anyone from advertising Medicaid programs and institute an enrollment cap of 500,000 – threatening the coverage of more than 200,000 Hoosiers.

"My concern is that we are making an assumption that the 300,000 that got added (from 2020 to 2025), they were just added because they were allowed to and they don't need the services," Qaddoura said. "Where's the data that says 300,000 don't need those Medicaid services?"

FSSA undertook a year-long redetermination process that concluded last spring after the COVID-19 pandemic to ensure everyone on the program qualified.

HIP covers individuals with annual incomes of up to $20,793; couples with annual incomes up to $28,214; a family of four with an annual income of $43,056.

Another concern for Qaddoura: whether there would be a federal insurance marketplace for those losing HIP coverage, as proposed by Mishler. The subsidies that make coverage affordable could also be struck by President Donald Trump, he said.

"Those individuals will have the emergency room become their primary physician and that raises health insurance premiums for all of us … and we will become a more unhealthy state," he said.

On the floor, Mishler said he believed work requirements "alone" would bring Indiana's enrollment under 500,000.

The changes to HIP have attracted the most pushback, especially the imposition of work requirements. Mishler pointed to the 11 exemptions outlined in the bill, which includes Hoosiers in a substance abuse program, parents of children under 6 and those with medical disabilities. Individuals may also volunteer up to 20 hours a week to meet this requirement.

However, advocates have pointed to imprecise wording, specifically noting that programming for substance use doesn't have a time limit.

Qaddoura said he agreed with Mishler that something had to be done, but disagreed with the bill's method. He pointed to Indiana's high health care prices and poor public health metrics as two contributors to Medicaid growth.

"The issue of Medicaid will not be solved by right-sizing the program, because people will unfortunately still be experiencing medical issues," Qaddoura said. "The underlying cause of the issue is a state that is really struggling to keep people healthy."

Another Democrat, Sen. Shelli Yoder of Bloomington, said the fiscal costs for the state would increase under the bill by requiring FSSA to check eligibility quarterly, rather than annually.

Mishler said the savings realized by the bill's restrictions would outweigh the greater administrative costs – though that information isn't included in the fiscal note.