INDIANAPOLIS | Barring an epiphany by Republican leaders at the Statehouse, Indiana appears likely to become one of just a few states nationwide refusing to expand its Medicaid program under the Affordable Care Act.
In separate meetings with reporters this week, Republican Gov. Mike Pence and Senate President David Long, R-Fort Wayne, said distrust of the federal government and the potential cost of adding 400,000 low-income, uninsured Hoosiers to the Medicaid rolls makes them oppose an unconditional expansion of Medicaid eligibility.
"The promises Washington, D.C., makes today can easily go away in the not-distant future, and I want to make sure that we're doing the right thing for Hoosiers' health and we're doing the right thing to preserve the fiscal health of our state in the long-run," Pence said.
Long said even though the federal government will cover 100 percent of the cost of new Medicaid enrollees from 2014 to 2016 and a declining share after that, he expects the state will be forced to pick up much more than the 10 percent maximum state share set to take effect in 2020.
"Those costs cannot and I don't think will remain at that split. I think the state is going to be required to take on a higher and higher percentage of that expansion," Long said. "It's going to be a significant tax increase for the people of Indiana to pay for that."
Under the Affordable Care Act, also known as Obamacare, states are required to expand Medicaid eligibility to Americans earning up to 133 percent of the federal poverty level, which is $14,856 for an individual or $30,657 for a family of four.
However, states cannot be punished if they fail to expand Medicaid. An Indiana resident currently must earn less than 22 percent of the federal poverty level — that's $2,457 for an individual or $5,071 for a family of four — and have limited assets to enroll in Medicaid.
Even at that level, Pence isn't convinced that Medicaid is a program worth keeping, let alone expanding.
"Medicaid is a system that's broken, it's rife with waste and even fraud, and I don't think it serves the interest of Hoosiers in the program or serves the long-term interests of Hoosier taxpayers," Pence said.
The Republican-controlled Indiana Senate on Tuesday voted 44-6 for Senate Bill 551, empowering the state's Medicaid office to negotiate with federal health officials on a Medicaid expansion that would ensure the state controls the program, limits health services and requires contributions from participants.
Pence said the only way he'll consider Medicaid expansion is if it follows those principles, which nearly mirror the terms and conditions of the existing Healthy Indiana Plan.
"I think standing firm on the Healthy Indiana Plan because it's right for Hoosiers, is the right decision," Pence said. "But I also think standing firm against an expansion of traditional Medicaid is the best pathway to preserve the fiscal health of our state."
House Democratic Leader Scott Pelath, D-Michigan City, and Senate Democratic Leader Tim Lanane, D-Anderson, said they believe failing to expand Medicaid eligibility because of the fear of some future federal double-cross is a huge mistake.
"We can't afford to not do this," Pelath said. "It is wildly expensive to keep sending people to the emergency room and it's reckless to not proceed in a way that's already provided for us by law."
Lanane pointed to a study by the Indiana Hospital Association showing that Medicaid expansion will create 30,000 private-sector jobs and help produce a healthier state, the financial benefits of which are incalculable. Whereas, he said not expanding Medicaid will continue to cost Hoosier hospitals billions of dollars each year in uncompensated care.
"This is probably one of the best deals that has ever come down from the federal government," Lanane said.
He added that there's also the question of what happens if the federal government doesn't accept the state's conditions for a Medicaid expansion, and so far there's no indication they will.
"What's Plan B?" Lanane said. "Are all our federal tax dollars going to pay for health care in Michigan, Ohio, Kentucky, Illinois, and we are the island of the uninsured because we are stubborn and didn't want to do this in the most rational way?"
Debate over Medicaid expansion is set to continue during the two months remaining in the legislative session as the Republican-controlled House begins its consideration of the conditional expansion contained in Senate Bill 551.