Indiana would have a three-year moratorium on construction of most new nursing homes under a proposal the state House narrowly approved Tuesday.
The 52-40 vote came after a similar bill failed a year ago following private lobbying by a senior Republican lawmaker whose family business faced losing millions of dollars in revenue under a moratorium.
The proposed moratorium through June 2018 would largely prohibit the Indiana Department of Health from giving licenses for new nursing homes, except for counties with occupancy rates greater than 90 percent. It wouldn't prevent construction of about two dozen new facilities that have already submitted plans to state agencies or construction of assisted living centers.
House Ways and Means Committee Chairman Tim Brown, the moratorium bill's sponsor, said thousands of unused nursing home beds are costing the state millions in annual Medicaid costs based on a payment formula that includes construction.
"It's the cost of all buildings, the cost of all beds are borne by the taxpayers of the state of Indiana," said Brown, R-Crawfordsville. "So, when we have unfilled beds, we are all paying for those as taxpayers."
Opponents of the proposal say it violates free-market principles and will cost the state nursing home and construction jobs.
Rep. Heath VanNatter, R-Kokomo, read off a list of about a dozen cities where he said planned nursing home projects costing $12 million or more were threatened by the moratorium.
"That's lost jobs," he said. "Every one of those facilities, that's about 120 permanent jobs."
An Indiana Family and Social Services Administration report released in December found the state had some 12,000 available beds among about 530 licensed nursing homes. The state could see a $24 million increase in annual Medicaid costs with the additional proposed nursing homes, according to the report.
While moratorium supporters say more people are seeking to move into assisted living centers rather than nursing homes, Rep. Charles Moseley, D-Portage, criticized the proposal as a "one-size-fits-all" plan.
"You are going to harm portions of this state to satisfy some preconceived notion that you're saving the state money," Moseley said.
The Senate voted 35-14 in favor of the moratorium proposal last month. The bill now returns to the Senate for consideration since the House pushed back the deadline for new nursing home projects to move forward from the end of 2014 until March 1.
Passage of the construction moratorium would be a reversal from last year, when then-House Speaker Pro Tem Eric Turner worked in private meetings of House Republicans to defeat proposal.
The House Ethics Committee determined that Turner didn't technically violate House ethics rules barring lawmakers from using the office for their own self-interest, but he resigned his legislative seat in November.
The only hint of last year's controversy during Tuesday's debate came when Rep. Steve Davisson said nursing home developers should have expected the moratorium proposal would be returning.
"It's obvious. I don't know why they would not plan ahead," said Davisson, R-Salem. "I feel like if they were just speculating that we aren't going to pass this legislation, they should've put their dollars in other places."