Indiana underestimated Medicaid cost by nearly $1 billion, report says

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Indiana’s initial estimate for Medicaid expenses is nearly $1 billion short of its now-predicted need, state lawmakers learned in a report that ignited concern over the state’s budget and access to the low-income health care program.

A December outlook found that Medicaid is predicted to need $984 million more than what was thought in April, when the state’s biennium budget was finalized.

State budget director Zachary Jackson told The Associated Press the forecast used to develop the budget allowed Indiana to move $525 million from Medicaid to the state’s general fund in July. The state has directed that $271 million of that money be moved back to Medicaid to address the shortfall of the last year, he said.

According to the predictions presented to lawmakers on Tuesday, the state will need to appropriate $255.2 million more for the program before July 2024 and $457.9 million more for the following year.

The flawed April forecast was based on data that did not reflect the latest needs of enrollees, state agencies said. Jackson said demand for certain categories, such as elderly care, outpaced what state official anticipated. According to the report, home and community based long-term services and support are anticipated to be in need of the most funding over the next two years.

Medicaid director Cora Steinmetz told lawmakers Tuesday that the agency is working on proposals for controlling costs, prompting concern over access to the the program.

“We’re exploring all aspects of the Medicaid program to look at where there might be an opportunity to generate potential savings on the appropriation,” Steinmetz said.

Indiana’s lawmakers finalize the state budget during odd-numbered years, leaving lawmakers and state agencies with a limited a path to enact legislative change in the upcoming 2024 session. Steinmetz said the agency will draft proposals for cost containment within the power of the agency and the budget committee.

States across the country are unwinding pandemic-era protections that kept millions of people covered by Medicaid. In Indiana, the number of people enrolled in Medicaid steadily grew every month from March 2020 until May of this year, when the federal budget law ended the protections.

Indiana’s total enrollment has fallen every month since then. Even so, the demand is still greater than before the pandemic.

According to the report, Indiana saw a net growth of over 370,000 Medicaid enrollees since January 2020.

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17 thoughts on “Indiana underestimated Medicaid cost by nearly $1 billion, report says

    1. So i did hit the link above. 2.27 million people receiving some form of assistance from Medicaid. i googled the population of Indiana and got 6.806 million as of 2021. I did the division and came up with 0.333529. That is 1 in 3 people in Indiana. This number seems extraordinary to me. Is it just me?

    2. I guess it is a 50% increase from pre covid. Even the math for Janaury 2022 is 1.5/6.806=0.22039, which is a little over 1 in 5. That is obviously better but still seem high to me. Seniors make up 16.9% of our population 64 and older. Surely only 1 in 5 in that age group…maybe as high as 1 in 3. would be 5.63% ….where are all these other medicaid claims coming from?

  1. It’s almost like accelerating income tax cuts based on short-term cash flows was a bad idea! Where else have I seen this? Oh yeah, the “Great Kansas Tax Cut Experiment.”

    1. Step 1) claim tax cuts primarily for the rich will pay for themselves and stimulate the economy, despite all evidence to the contrary
      Step 2) at the first sign of having cut taxes too far (exploding deficit), pretend to be serious about the deficit and propose massive cuts that affect the middle class as the only solution. Rolling back those tax cuts? Never an option.
      Step 3) repeat steps 1 and 2 on a loop.

    1. Please provide your credible source of data suggesting that this billion-dollar shortfall can be blamed on an increase in undocumented immigrants, and that their population is increasing every day. Or did you just make that up?

    2. Many of the same people complaining about inflation and high wages are the same people who blame everything on immigrants.

      I mean, pick one or the other.

    3. A.R., “illegal immigrant” is not a race. But nice job conflating the two, now THAT is textbook racism.

  2. We hear lots of complaints about the costs of helping the needy but rarely complaints about State using taxpayer money for corporate welfare schemes to boost the rich business sector that knows how to work the pay for power political system in their favor.

    1. Well, they may or may not pay them, depending on how much they pass on to their customers. But I don’t think that was the point of Charles B’s comment. I think it was about how corporations are frequently the beneficiaries of state tax dollars in what may or may not be corporate welfare programs. For example, maybe by state and local grants for new business construction that likely would occur anyway, and the expected tax receipt revenue to the state or local government does not equal the payouts. I think this analysis often applies to sports venues, and greenfield corporate expansions.

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