House, Pence split on HIP Medicaid expansion

Published on NewsOK Modified: February 21, 2013 at 8:17 pm •  Published: February 21, 2013

Pence argued last week in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius that Medicaid was "broken" and expanding it carried too big a price tag for Indiana. He has not yet said how much using HIP would cost, and his administration has argued that the number is not relevant until the state receives an answer from CMS.

The Indiana Hospital Association is among the groups pushing hard for the state to accept some type of expansion. The association estimates that $10.5 billion in federal aid is on the table over the next seven years. Lawmakers in the House and Senate, meanwhile, are working on legislation that would effectively expand Medicaid by building a HIP program for residents earning up to 138 percent of the federal poverty line.

The cost to the state of any expansion stifled most debate in the Statehouse until a few weeks ago. The actuary hired by the state pegged the cost of expanding Medicaid at $2 billion over seven years and estimated the state would pay more than $600 million over that same period as residents who already qualified for Medicaid but had never enrolled were forced into the program by the individual mandate.

The IHA released its own study estimating Indiana would pay $503 million for the expansion, a major decrease due in part to its expectation that doctors treating Medicaid patients would be reimbursed at 60 percent of the rate paid by Medicare. The state's actuary assumed that rate to be 80 percent.