Some Hoosiers could be kicked off Medicaid if President Donald Trump’s “One Big Beautiful Bill Act” passes in its current form, as the state grapples with the revenue cuts that would come with it.
Language added to the federal legislation on June 16 caps the Medicaid provider tax — which is used to cover 90% of the state’s portion of the costs for the Healthy Indiana Plan — at 3.5%. Indiana utilizes a 6% provider tax, meaning the change would decrease funding from the fee by nearly half. Opponents of the provider tax view it as a loophole used by states to qualify for matching dollars from the federal government, which pays for 90% of the costs of the program, without having to dedicate much of their own funds.
If passed as is, Indiana would not be able to afford the current costs of the Healthy Indiana Plan, the state’s insurance program for low-income people, Indiana Family and Social Services Administration Secretary Mitch Roob said at a state budget committee meeting June 18.
But neither Roob nor Gov. Mike Braun are asking Congress to keep the full 6%. Instead, Roob said at the meeting that he wants Congress to add language that would give states the flexibility to adapt.
Those changes would allow the state to enroll fewer Hoosiers in HIP, according to Roob.
“Please give us the needed flexibility to roll back our eligibility if they change the fuel mix for our program,” he said at the meeting.
Even without the added impact of the federal legislation, the state is making it more challenging to qualify for Medicaid. The latest version of HIP already includes more restrictions, such as work requirements for able-bodied recipients that passed the legislature this year. The new law includes a list of exceptions, though not all would be covered under the work requirement language proposed in the federal bill.
In a statement June 18, Braun said the efforts to reduce federal spending were overdue.
“However, flexibility in managing Indiana’s HIP program will be essential for the state moving forward, especially if we are required to take on more of the financial obligation,” he said in the statement. “This will require a hands-on approach to updating and maintaining Indiana’s Medicaid system that only Hoosiers can provide.”
Braun said he would work to “stretch the dollar” for people with chronic diseases and those who “really can’t afford health care” when speaking to reporters at the Indiana Statehouse on June 19.
“That’s what I’d like to have it there for, not what it’s expanded into with very lax supervision, pushed by the feds and now with a bunch of begrudging state partners because it’s been busting the budget,” he said.
The provision has already faced some GOP opposition in the U.S. House of Representatives, which must approve this version of the bill before it can move on. With a slim Republican majority, it’s possible the part of the bill that imposes the 3.5% tax cap could be removed.
The version that already passed the House only capped future increases in provider fees.
Contact Marissa Meador at mmeador@gannett.com or find her on X at @marissa_meador.
This article originally appeared on Indianapolis Star: Hoosiers could be kicked off Medicaid under Trump’s ‘big beautiful bill.’ What to know
Reporting by Marissa Meador, Indianapolis Star / Indianapolis Star
USA TODAY Network via Reuters Connect
