The Disabled Will Pay for Indiana’s Medicaid ‘Forecasting Error’

To fill a $1 billion hole driven by ObamaCare expansion, the state cuts money for caretakers

By Jonathan Bechtle. He is chief operating officer of the Foundation for Government Accountability. Excerpts:

"Late last year, Indiana announced that its Medicaid program faced a roughly $1 billion shortfall or, as officials called it, a “forecasting error.” While the state is blaming cost overruns in traditional Medicaid, the 2015 expansion by then-Gov. Mike Pence is wildly over budget, too. It cost taxpayers nearly $5.4 billion in 2023 alone, with roughly $540 million paid for by Hoosiers. This is the inevitable result of Medicaid expansion, which has enrolled far more people than advocates predicted.

In 2015 Indiana estimated that roughly 433,000 would join the Healthy Indiana Plan, as the state’s Medicaid expansion is called, in its first two years. Officials predicted enrollment growth would remain stable after three years. But by 2023 enrollment reached 604,000—40% more than anticipated. Taxpayers are covering a new class of able-bodied adults who should be pursuing work to pay for health insurance. Instead, Medicaid expansion encourages them to work less, or not at all, to get the taxpayer’s help.

The $1 billion budget “error” is bad enough, but the state agency’s response was even more shocking. In January the Family and Social Services Administration announced plans to cut payments to caretakers—usually parents or spouses—of elderly and disabled Hoosiers. The blowback was swift, with parents protesting outside the statehouse. They have a point: Indiana is cutting funding for families of children with severe disabilities."

"At the heart of Medicaid expansion is a perverse incentive. The federal government has agreed to pay 90% of its costs, yet for traditional Medicaid it pays a little under 65%. For the people who run Indiana’s budget, there’s only one logical solution for closing the budget shortfall: cut funding for people who only bring in 65 cents on the dollar, instead of those who bring in 90 cents. It doesn’t matter that the 90-cent group includes those who are able-bodied and could receive health insurance elsewhere. Washington is footing more of the bill, and states have an incentive to keep it that way."

"The per person cost to taxpayers is at least 64% higher than predicted, meaning every expansion state is on the same dismal road as Indiana."