Republicans in state Senate block Democratic efforts to expand Medicaid

State Senate Democrats, who want to expand the program for a three-year period during which the federal government would pick up the full cost for covering 400,000 Hoosiers, offered a measure that would have ended the expansion as soon as the federal health care law stopped covering its full cost.

It was an amendment to Senate Bill 551, which would trigger such an expansion only if the U.S. Department of Health and Human Services allows Indiana to have a block grant and use its health savings account-based program as the vehicle for the expanded coverage.

The proposal was modeled after Florida Gov. Rick Scott’s decision to expand Medicaid for at least three years because, he said, failing to do so would force his state’s taxpayers to subsidize care elsewhere.

“We cannot be known as Indiana, the island of the uninsured,” said Sen. Karen Tallian, D-Portage, who pushed the amendment. She noted that the state’s neighbors — Illinois, Ohio, Michigan and Kentucky — are each moving forward with expansions.

Tallian also pointed to an Indiana Hospital Association study that found an expansion could funnel $10.5 billion in federal Medicaid payments into the state between now and 2020, drawing about 30,000 jobs along the way.

“My proposal is simple, and it’s a minimal offering. Accept the expansion now, through the end of 2016, when the federal government is paying 100 percent,” she said.

Senate Republicans, though, rejected Tallian’s effort. The chamber’s two top fiscal leaders said they are unconvinced federal officials would keep their bargain, and even after three years, the state couldn’t easily drop coverage for new enrollees.

Senate Tax and Fiscal Policy Chairman Brandt Hershman (R-Buck Creek) criticized the “irrational exuberance about this pot of federal money that makes it seem like a birthday and Christmas rolled into one.”

He said the “concept that this is free money is just flat-out wrong,” and that “this is being financed on a federal credit card.”

The Senate will vote today on the full bill, authored by Senate Health and Provider Services Chairwoman Patricia Miller, R-Indianapolis.

The Medicaid expansion was a key part of President Barack Obama’s 2010 health care law, but was thrown into jeopardy when the U.S. Supreme Court ruled last year that states could opt out of it.

For states that do grow their Medicaid rolls to include residents earning up to 138 percent of the federal poverty line — or around $32,000 a year for a family of four — the federal government will pick up the full tab the first three years, and then its share will taper off to 90 percent by 2020, with states paying the difference.

Gov. Mike Pence has compared the expansion’s impact on the state’s budget to the federal government gifting Indiana with a “baby elephant” that it would feed in its early years, and then hand over as a full-grown animal with an insatiable appetite.

By 2022, the Urban Institute estimates 943,000 Hoosiers will be eligible for Medicaid — including 72,000 who meet current eligibility requirements but aren’t signed up — if Indiana declines to expand the program.

Another 495,000 Hoosiers could qualify for coverage if the state does move forward with an expansion. That would reduce the state’s 867,000 uninsured residents, and it would cost the state $537 million by 2022, according to the Urban Institute, but Indiana’s actuaries have estimated the cost would be much higher.

Pence has asked the federal government to approve the Healthy Indiana Plan, which used health savings accounts, as a vehicle for a Medicaid expansion. Only if they say “yes,” he’s said, will he make a decision on whether to do so.