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New estimate drops health plan's cost to Indiana

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A new estimate has lowered the expected cost of the federal health care overhaul to Indiana's state government to perhaps $2.6 billion over the next decade — $1 billion less than an initial projection made last spring.

That estimate given to state legislators by an outside actuary hired by the administration of Republican Gov. Mitch Daniels drew criticism from some Democratic lawmakers.

Robert Damler of the actuarial consulting firm Milliman Inc. told the state's Medicaid oversight commission on Monday that new information provided by the federal government will drop the possible costs an additional $330 million. The firm in May had lowered its initial estimate to $2.9 billion.

The initial estimate of $3.6 billion assumed the Medicaid program would enroll all eligible Indiana residents — federal estimates project only about 80 percent — and that they will drop existing private insurance through employers and other means for the government coverage, The Journal Gazette of Fort Wayne reported.

The latest change is because the Centers for Medicare and Medicaid Services in late September changed its interpretation of the law regarding a prescription rebate program, which Damler said dropped Indiana's potential fallout to zero.

House Ways and Means Chairman Bill Crawford, D-Indianapolis, said that previous estimates had been $500 million for that expense.

"There's not a lot of confidence in this report," Crawford told WRTV.

Damler declined to remove an estimated $600 million in costs from the report that could come as a result of increased physician reimbursements. Several lawmakers pointed out that the increased reimbursements are not required under the federal law .

"This report is supposed to reflect the state's projected expenditures based on the act. I am looking forward to additional corrections," said Senate Minority Leader Vi Simpson, D-Bloomington.

Damler said the federal act increases physician reimbursement rates for a two-year period and provides funding to cover the increase. After that, he said, states will likely have to pick up the cost even though it is not currently required.

Indiana Family and Social Services Administration spokesman Marcus Barlow said the federal government has been slow to provide details, making it difficult to estimate the impact of the health care overhaul.

"As we get more information from the federal government, we are constantly revising what the estimates will be," he said. "Even under the best case scenario, that's still $2.5 billion we'll have to find somewhere."

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  • GOP web of disinformation
    Can you ever believe anything that comes from a Mitch Daniels appointed group/individual. They are in the business to report only the half trugh and not the whole truth and nothing but the truth. Why? to pay back WelPoint's big donations to the GOP and their sweetheart deals to their own and former execs.
  • Is this good news?
    Good article and coverage, but do these new figures reflect good news? I say no. In fact, I would argue that this development further underscores the biggest cost of the entire federal health care bill, uncertainty.
    An actuarial report swinging $1Billion dollars! I know we're jaded by big numbers these days, but the fact that our best actuarial estimates available first jumped up by billions then dropped back down by a billion on a month by month, seemingly day by day, basis should freak everyone out. The reason is that the Dems crammed this bill through without any thought of how it would be implemented or how complicated the rule making process would be, and i'm not even going to touch the merits of the bill in the first place.
    When the actuarial studies turn into actual tax dollars, anyone with a pulse knows it will be higher than they say. At this point it feels like the state is playing a game on the Price is Right and looking out to the crowd for the right number. Expect the estimates to change again and, if this report is any indication, change drastically. The bottom line is that the federal govt, by way of health care reform, has taken a dump in the taxpayers' cereal box and then asked us to be excited when we're able to pour out a few pieces that aren't covered in crap.

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  1. President Obama has referred to the ACA as "Obamacare" any number of times; one thing it is not, if you don't qualify for a subsidy, is "affordable".

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