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Lawmakers brace for health law, potential costs

Associated Press Published: November 18, 2012
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Indiana's Medicaid actuary, the group providing detailed analysis for Gov. Mitch Daniels' administration, tagged the cost of doing nothing at $612 million combined over seven years based on an assumed "woodwork effect": poor residents are driven out of the "woodwork" by the individual mandate to seek Medicaid coverage and other residents are dropped from their employers' health care plans.

Milliman, the state's actuary, estimated that a full expansion of Medicaid would cost the state $2.6 billion over that same time.

Former Senate Minority Leader Vi Simpson, a Bloomington Democrat, questioned the validity of the report, noting that it leaves out estimated savings from spreading risk across a greater pool of insured residents -- the key concept Democrats have argued would "bend the cost curve" of unmitigated health insurance premium spikes in the last decade or so.

"What we really need are cost estimates from a third party that's unassociated with, or independent of the state, in order to get real numbers," said Simpson, who studied the federal law before running with Democrat John Gregg against Pence.

But any increase in spending is likely to ruffle lawmakers eyeing another two years of austere growth in tax collections matched with increasing demands from state agencies and universities that tightened their belts in recent years.

And questions about the actual cost of the law are met with even more questions from confounded lawmakers who say they can't get a straight response from the federal government.

"I don't know if the General Assembly is ready to take any action," said Sen. Pat Miller, chairwoman of the Senate's health committee. "If we could get some of our questions answered, I could tell you."

Some of lawmakers' key concerns, Miller said, deal with the level of coverage from any plan and details like whether adult and children's dental visits will be paid for.

As the questions continue to swirl, one thing is clear: Indiana's lawmakers are bracing for something big. They're just not sure exactly what yet.