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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. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  2. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

  3. Good try, Mr. Irwin, but I think we all know the primary motivation for pursuing legal action against the BMV is the HUGE FEES you and your firm expect to receive from the same people you claim to be helping ~ taxpayers! Almost all class action lawsuits end up with the victim receiving a pittance and the lawyers receiving a windfall.

  4. Fix the home life. We're not paying for your child to color, learn letters, numbers and possible self control. YOU raise your children...figure it out! We did. Then they'll do fine in elementary school. Weed out the idiots in public schools, send them well behaved kids (no one expects perfection) and watch what happens! Oh, and pray. A mom.

  5. To clarify, the system Cincinnati building is just a streetcar line which is the cheapest option for rail when you consider light rail (Denver, Portland, and Seattle.) The system (streetcar) that Cincy is building is for a downtown, not a city wide thing. With that said, I think the bus plan make sense and something I shouted to the rooftops about. Most cities with low density and low finances will opt for BRT as it makes more financial and logistical sense. If that route grows and finances are in place, then converting the line to a light rail system is easy as you already have the protected lanes in place. I do think however that Indy should build a streetcar system to connect different areas of downtown. This is the same thing that Tucson, Cincy, Kenosha WI, Portland, and Seattle have done. This allows for easy connections to downtown POI, and allows for more dense growth. Connecting the stadiums to the zoo, convention center, future transit center, and the mall would be one streetcar line that makes sense.

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