New report says expanding Medicaid would lower insurance premiums, add jobs

It comes as lawmakers prepare for key House and Senate committee hearings Tuesday where they’ll debate whether Indiana should add 400,000 Hoosiers to its Medicaid rolls through the federal health care law.

Doing so would mean between $2.4 billion and $3.4 billion in economic activity between 2014 and 2020 — enough to create about 30,000 jobs — according to the report released Monday. It was commissioned by the Indiana Hospital Association and conducted by the University of Nebraska Medical Center for Health.

“Expanding coverage in Indiana would benefit all Hoosiers,” said Doug Leonard, the hospital association’s president. “This report demonstrates the positive impact that extending coverage would bring to our state’s economy and the overall health of our communities.”

Gov. Mike Pence and members of Indiana’s Republican-dominated General Assembly say they aren’t so sure. They say even though the federal government would cover 90 percent of the tab, they fret about a Medicaid expansion’s impact on the state budget.

“No matter what you think the cost is, it’s clear that eventually there’s going to be significantly more state dollars that are going to go into this program,” said Sen. Luke Kenley, the Noblesville Republican who is among the budget’s leading architects.

“We would like to have some control over the expenditure of our own state dollars to try to develop a good medical plan that will get to the right people and provide the right services at the right cost.”

Proposals up for debate Wednesday in the House and Senate public health committees’ hearings would have Indiana pursue such an expansion by using the state’s health savings account-based program.

They say the Healthy Indiana Plan, which requires small individual contributions and includes a lifetime coverage cap, would give them a greater measure of control.

“It gives the patients not only a sense of responsibility in terms of making these decisions, but it gives them a little bit of control in making these decisions,” Kenley said.

The Indiana Hospital Association’s report said that if Indiana expands its Medicaid program, individuals would see their premiums drop by $236 per year and families would save $677 annually.

It said the state and local governments would get an extra $108 million in tax revenue as a result of coverage being provided to those who currently receive care in emergency rooms and then can’t foot the bills.

And it suggested slight reductions in the number of Hoosiers who die because they don’t have insurance — there were 499 such deaths in 2010 — and bankruptcies.

The report’s results are a dramatic departure from those offered by Milliman Inc., the actuary for the Indiana Family and Social Services Administration.

That firm has warned that Indiana would suffer a blow of more than $2 billion to its budget between now and 2020 if the state expands its Medicaid program to cover those who earn up to 133 percent of the federal poverty line — or around $31,000 for a family of four.

The Indiana Hospital Association’s report suggests the extra tax revenues and the overall health care cost reductions would help the state absorb the expansion into its budget, but it doesn’t tackle long-term costs after 2020.

The House’s leading budget-writer, Republican Ways and Means Committee Chairman Tim Brown of Crawfordsville, said he’ll wait to see what the public health committees in both chambers do before making decisions on whether to include a Medicaid expansion in the state’s next spending plan.

He said the impact of an expansion would be “widely varied,” but would be a significant boon to hospitals that currently treat high numbers of uninsured Hoosiers.

“That’s what hospitals are looking at — can they decrease some of those write-off expenses where people are uninsured,” he said, “and that will make a difference in terms of their health and viability