Op-ed: Hoosiers need Medicaid and that won’t change with a new administration

As Trump takes his second oath of office, we get closer to the possibility of Robert F. Kennedy and Dr. Mehmet Oz as our nation’s top public health officials. They’ll become the point people in charge of state Medicaid funding and policies. Like Indiana, the federal government will have some difficult budget decisions to make thanks to stagnating revenue.   

Republican tax cuts, mostly for the wealthy, continue to stress our budgets. Something will have to give as we approach an unsustainable level of national debt. Trump has declared cuts for Social Security and Medicare off-limits, but no similar promise has been made for Medicaid. It’s clear that federal funding for Medicaid is on the chopping block. Remember that the federal government foots around 70% of Indiana’s $19 billion bill. Over 2 million Hoosiers are on this growing health care program, and any significant changes could affect their access to care. Here are a couple of devastating cuts that could happen to the Medicaid program: 

 The first is block granting. The idea of block grant federal funding for Medicaid has existed since President Ronald Reagan's administration. With these grants, the government gives a fixed amount of funds based on inflation and population growth. This plan motivates states to contain costs, but it’s difficult to anticipate how much money Medicaid will need. Indiana would fare poorly under this plan since flat population growth and limited medical inflation would lead to a smaller grant. Our state would need to increase its share of funding to maintain the status quo. We can forget any additional enhancements like more waiver slots or the coverage of GLPs for weight loss. Block granting hasn’t gone anywhere for forty years, but with Trump returning to office this could be a reality. 

Second is the sunsetting of programs that fund our HIP program and supplements for eldercare assistance. If federal support is drastically reduced, the HIP program will end unless state dollars fund it entirely. 

The third is the recategorization of mandatory services. Medicaid currently has two general types of services covered: mandatory and optional. Mandatory services include hospital visits, doctor appointments and outpatient services. Optional services include dental, physical therapy and prescription drugs. To cut costs, mandatory services could be recategorized and covered at a reduced rate. This would be devastating to Hoosiers and providers since it lowers their reimbursements. Indiana already has shortages of care, and one can only imagine what would happen if the required provisions for Medicaid changed. 

 Fourth is the creation of work requirements, and a bill has already been filed for this session. Indiana attempted to implement work requirements last year, but it was blocked by the Biden Administration. 

Fifth is watering down the federal pledge to fund 90% of the Affordable Care expansion. This could also spell the end of Indiana’s HIP program that supports thousands of Hoosiers. 

It’s pitched as an effort to save costs, but thousands would lose their coverage. Over 500,000 Hoosiers would potentially lose health care coverage. Uncompensated coverage would shift the cost to hospitals and providers. Fewer people will go to the doctor and those with existing conditions will worsen trying to avoid enormous medical bills.  

National decisions will have an impact on Hoosier health and our Medicaid program. We’ve been blessed with infusions of federal dollars since COVID-19. Indiana is already struggling without the extra funding, and the prospect of funding reductions will only aggravate our predicament. The majority party leaders have been open with their desire to cut funding, saying our current allocation “keeps them up at night.” At the December Medicaid forecast, the same leadership said our funding challenge “scared them.” Even if federal cuts don’t happen, Indiana’s state funding will need to increase by $500 million.

Every dollar is attached to a person, and we cannot cut more. The supermajority has cut services for medically compromised children, vulnerable adults and families in need of child care. Indiana has saved a minimal amount with horrendous consequences and unnecessary pain. I sincerely hope that efforts to curtail costs will not be cut focused. We have other options, including creatively expanding our revenue, to adequately fund Medicaid. 

We could increase the cigarette tax by $2 per pack. This would add over $100 million a year to our revenue. Another element is promising to stop reverting Medicaid appropriations to the general fund. This has been done for the past several years. We could also fully consider maximizing any unrealized federal funding opportunities that we’re not using. The window is closing to implement these changes before it’s too late. I have seen the legislature act quickly in the past to provide tax relief, so I know it can be done if we have the will to act. 

This session, let’s protect Medicaid and preserve Indiana’s essential health infrastructure. Let's protect Medicaid since it's a vital program for one in three Hoosiers. Let’s lead by example and show other states we’re up to the Medicaid funding challenge. Let’s eliminate our health care deserts. Indiana can become a health care oasis for all Hoosiers regardless of income or health conditions.