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New report highlights potential benefits of Medicaid expansion

February 12, 2013

Days after Gov. Mike Pence came out against expanding Medicaid, the Indiana Hospital Association has issued a report that estimates increasing coverage could generate up to $3.4 billion in new economic activity and finance more than 30,000 jobs in the state through 2020.

The study, completed by the Center for Health Policy at the University of Nebraska Medical Center, predicts that the $503 million Indiana would pay to cover more individuals under Medicaid through 2020 would be offset by $10.45 billion in revenue the state would receive from the federal government.  

The Indiana Hospital Association commissioned the report.

Expanding Medicaid is a key component in the Obama Administration’s health care reform, the Patient Protection and Affordable Care Act. However, in its June 2012 ruling, the U.S. Supreme Court struck down the provision that required states to expand Medicaid. States now can decide whether or not they want to increase the government insurance program to cover individuals with an annual income up to 133 percent of the federal poverty level.  

For states that do bring more residents into the Medicaid program, the federal government will fully fund the expansion for three years starting in 2014 then gradually roll back funding to 90 percent by 2020.

Expanding Medicaid would bring more than 406,000 Hoosiers into the program, according to the study. But, the study also indicates that by significantly decreasing the number of uninsured Hoosiers, the costs of uncompensated care being shifted to paying patients would be reduced. Consequently, individuals with private insurance would save $236 and a family would save $677 in annual premiums beginning in 2014.

Pence has said he will expand Medicaid only if the state can use its Healthy Indiana Plan to cover the new enrollees. The governor is concerned Indiana could be burdened with a bulk of the costs of the expansion in the long run.

Backed by a coalition of House and Senate Democrats, Sen. Karen Tallian, D-Portage, has introduced legislation that would expand Medicaid and lay the groundwork for establishing a health care exchange. Senate Bill 540 has been assigned to the Committee on Appropriations, but it has not received a hearing.

 

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