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Rising Medicaid costs for Indiana mean service cuts likely

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Indiana lawmakers likely will cut some Medicaid-provided services in the upcoming legislative session after learning Wednesday that the state's share of government health insurance program costs will balloon by $1.1 billion over the next two years unless checked.

The federal government pays about two-thirds of Indiana's Medicaid costs, but human services chief Michael Gargano told the State Budget Committee that the state's share has been growing by more than 10 percent each year. He said that's because the recession has made more people eligible for Medicaid, which serves those who are needy and disabled.

Gargano, secretary of the Indiana Family and Social Services Administration, asked for an additional $900 million in state Medicaid funds over the two-year period starting next July 1. He recommended the General Assembly rein in the costs by cutting some optional services the state currently provides.

He didn't identify specific services lawmakers could cut. But details will likely come when the Family and Social Services Administration presents its annual Medicaid spending forecast to the budget committee on Dec. 15.

Lawmakers are so concerned about ballooning Medicaid costs that cutting some services is not the only option they want to pursue. Senate Appropriations Chairman Luke Kenley, R-Noblesville, said Indiana should join Texas and other states that are considering opting out of Medicaid.

"We can't afford it. We have to be serious about finding alternatives," Kenley, who also chairs the budget committee, told The Associated Press.

The state has one of the most comprehensive Medicaid programs, providing about 30 optional services including prescription drugs, eyeglasses, dental work, hospice care and smoking cessation.

Enrollment has grown from about 850,000 Indiana residents in 2005 to about 1.1 million currently in programs including Hoosier Healthwise for children and pregnant women, the Healthy Indiana Plan for uninsured, low-income adults and Care Select for people with disabilities.

The Family and Social Services Administration projects that two years from now, total enrollment will approach 1.3 million. That means one in every five residents would be on Medicaid.

Gargano said the Medicaid appropriation from the General Assembly two years ago has been slashed through austerity moves ordered by Gov. Mitch Daniels and is on track to create a budget shortfall in the current fiscal year. Indiana also will lose more than $300 million per year now provided by federal stimulus funding while incurring more than $500 million in new costs over the next two years unless lawmakers cut services, he said.

"This Medicaid thing is shocking," said Rep. Jeff Espich, R-Uniondale, the new chairman of the House Ways and Means Committee, where the new state budget will originate in the upcoming session. "We're going to have to reduce the growth."

David Roos, state director of Covering Kids & Families of Indiana, said he and other public health insurance advocates want lawmakers to balance the long-term interests of their constituents against short-term budget shortfalls.

"Advocates hope the administration and our Legislature will continue to show leadership and creative thinking to minimize any cuts in these vital services," Roos said.

Kenley first raised the idea of Indiana opting out of Medicaid last spring when actuaries for FSSA projected the federal health care overhaul passed by Congress would cost the state billions of dollars. He raised that prospect again Wednesday as a way of dealing with the immediate budget problems facing the state.

He asked FSSA officials if the state could find a way to opt out of Medicaid while capturing the federal government's share of the program's costs to operate an alternative program more efficiently. Texas Gov. Rick Perry also has raised the possibility of opting out of Medicaid in favor of a state-funded insurance system that backers claim could be more efficient and less expensive. Kenley said other states also are interested in doing that.

"If we're not reacting to the elephant in the room it's just going to squash us all," Kenley said during the budget meeting.

Such an alternative most likely would require action by Congress, and that's unlikely since Democrats still control the U.S. Senate and any legislation that were to pass would need President Barack Obama's signature. But Kenley was hopeful, explaining that if Congress could pass the health care reform in a matter of months earlier this year, it could find a viable way for states to opt out of Medicaid.

"This problem extends beyond the state of Indiana," Kenley said.

FSSA spokesman Marcus Barlow said the agency hasn't planned for opting out of Medicaid.

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  • Good Luck
    Good Luck
  • what i am i to do
    i am a college student of gary and i go to planned parent hood for check ups and birth control and resently they cut me offnow what am i to do about my pils i can not afford them
    ?
    • WHY?
      Ok we all know people take advantage of the system but why not take the people who actually are in need and help them, the others need to quite being lazy and quite taking money from everyone elses hard earned tax dollars because its so much easier than going out there and working for your money and working for insurance. Yeah not all jobs offer health insurance, and thanks to the new health care laws my insurance just about quadrupled for less coverage and a higher co-pay. It is seriously rediculous how many people take advantage of our systems that were put in place for a good thing. They just don't seem to be working the way they should. I say do away with medicaide and do only disability. If your in poverty whether it's your fault or not then do something about it. Yeah the economy is bad and yes there is a shortage of good paying jobs. This is AMERICA! Land of oppurtunity. If you need more money get a second job. There are oppurtunities out there. Yeah they may not be the most luxurious jobs but I have put my time in at Mcdonald's and you know what I am a harder worker and more productive individual for it. Also if you are a manager at Mcdonalds they offer some decent health insurance!
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      Thanks for your time!
    • Adoption of other State Methods
      Maybe, we should look into what other states do to handle the growing Medicaid issues and take notes. It seems that Indiana is "poor" on so many levels. Maybe, it should be that medicaid offers specific services based on need per individual. Maybe give up dental, and vision for supportive services if that is what an individual really needs. It's not really right to be deemed "disabled" just because your at state poverty level. There are thousands of people in the state of Indiana that have been and will continue to be on waiver lists to get services they need. The caregivers in their homes take the brunt of the expenses to care for their disabled family member. Therefore, this family stays at poverty levels. It's a vicious cycle and everyone knows someone who abuses the system. So just maybe, lets look at some successful states and take notes.
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      I have a family member that is very disabled and unable to get insurance through tradition work. She lives on a total of $400 a month in disablity for everything she needs. She gets this from when she did work for 20 years. How is to survive with out Medicaid. She would surely be dead if Medicaid didn't help. If not dead she would be in jail for not being able to pay the hospital bills. It is not irresponsible to take care of one's health. It is just exteremly costly for everyone but this is the reason we pay taxes. So try not judge when you haven't walked in someone elses shoe and thier reasons for Medicaid and the systems in place. The streets would have far more peopole begging for help if it wasn't there to help families.
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