New state estimates predict Indiana’s Medicaid costs will increase between around 600 million and 2.6 billion dollars over a seven year period once the Affordable Care Act goes into effect, but the actual costs depend on how the federal law is implemented.
The wide difference in potential cost calculated by Milliman Incorporated, the state’s actuary, is based on whether the state decides to expand Medicaid. If the state doesn’t expand the health care program, it will still see an increase of 612 million dollars. If full expansion occurs, it would cost 2.6 billion.
But Milliman consulting actuary Robert Damler said the 2.6 billion dollar figure is based on full participation.
"We don’t believe that a full participation will occur; it’s more of an end point estimate," Damler said. "We are comfortable with our best estimate, which is the 2.1 billion dollars estimate."
Health care consultant Seema Verma is leading Indiana’s ACA implementation. She said the state hasn’t made a decision on whether to expand Medicaid; that will be up to the next governor and legislature. Verma added that much of the uncertainty revolves around the Healthy Indiana Plan, a state-run health care program for uninsured Hoosiers. Indiana wants to use HIP for its Medicaid expansion, but the federal government has only granted a one-year extension to the program.
“We don’t know whether they’ll even let a HIP program, what we have today, whether they’ll just even let that continue at our regular match rates,” Verma said.
The state plan requires enrollees to contribute to HIP. Verma said whether the federal government will allow that is one of the biggest points of contention.