Indiana lawmakers are considering legislation that would require state administrators to perform regular, extensive checks to make sure that enrollees in the state’s Medicaid program qualify for coverage.
Senate Bill 2 would benefit Indiana Medicaid recipients by slowing the program’s movement toward insolvency as skyrocketing Medicaid costs threaten to devour all discretionary spending in the state. Nearly two million people in Indiana were enrolled in Medicaid at the end of 2024, in a state of just under seven million people. Indiana ran a Medicaid budget shortfall of more than $1 billion in 2023 and is still struggling to recover. The cost of Medicaid in the state increased by more than $5 billion in the last four years. Medicaid is forecast to cost Indiana taxpayers $10 billion over the next two years.
SB 2, which passed the Senate and is currently under consideration in the state’s House of Representatives, would require the Office of the Secretary of Family and Social Services to monitor multiple specified record sources at least monthly to determine recipients’ continuing eligibility and report annually on improper payments and eligibility enforcement.
The bill would prohibit state agencies, hospitals, other health care providers, and other entities from advertising about Medicaid or marketing the program to encourage people to enroll.
In addition, SB 2 would require able-bodied, mentally fit enrollees above the federal poverty level to work an average of 20 hours per week or meet other requirements to retain eligibility for Medicaid in the Healthy Indiana Program (HIP), which expanded Medicaid coverage to them under provisions in the Affordable Care Act of 2010. HIP has grown from 390,000 enrollees before the COVID-19 pandemic to more than 686,000 in December 2024. In addition to the work requirement, SB 2 would cap enrollment at 500,000.
“Almost all” those who should be removed are eligible for state-supported insurance exchanges, employer-sponsored health insurance, or Medicaid itself through redetermination, according to the Urban Institute. To provide care for those who truly need it and make insurance premiums more affordable for businesses and families who pay for private health insurance, Indiana must stop paying for people who do not qualify for Medicaid because they make too much money, live in another state, or are dead. The state should transition them to alternative health insurance options.
According to CMS data, $80.6 billion was improperly spent on Medicaid in 2022, and a staggering $98 billion in 2021, with the vast majority of the improper payments being attributed to lack of eligibility. Total improper payments decreased to an estimated $31.1 billion in 2024 as states began to cycle ineligible people off the program after the federal ban on disqualifications was lifted. Improving the verification process is essential for states to stave off fiscal disaster as costs continue rising.
Evidence from other states confirms establishing a robust eligibility verification system can significantly decrease Medicaid fraud and abuse. After the Illinois Department of Healthcare and Family Services launched the Illinois Medicaid Redetermination Project in 2012, the Prairie State removed 400,000 ineligible recipients and saved an estimated $350 million per year. SB 2 would similarly help retrieve taxpayer money spent improperly in Indiana.
Making contact with Medicaid enrollees just makes sense. States should find ways to communicate meaningfully with Medicaid recipients to help improve their overall care and determine their eligibility for scarce resources. It is unfair to give taxpayer money to people who do not qualify for it, as such payments divert resources from the truly needy and jeopardize the program’s fiscal viability, putting eligible recipients in danger of harsh future cuts to their access to health care.
Medicaid recipients benefit from an effective eligibility determination process.
The following documents provide useful information about Medicaid eligibility determinations.
Indiana Senate Bill 2 would require state administrators to perform regular, extensive checks to make sure that Medicaid enrollees continue to qualify for coverage; would require able-bodied people between the ages of 15 and 64 to work at least 20 hours per week or meet other requirements to retain eligibility for Medicaid; and would prohibit advertising and marketing of Medicaid.
Ineligible Medicaid Enrollees Are Costing Taxpayers Billions
Hayden Dubois and Jonathan Ingram of the Foundation for Government Accountability detail the scale of improper Medicaid payments based on enrollment eligibility problems.
October 2024 Medicaid & CHIP Enrollment Data Highlights
The Centers for Medicare and Medicaid services provides a snapshot of Medicaid and CHIP enrollment and of eligibility operations.
American Health Care Plan: State Solutions
Researchers from The Heartland Institute explain what states can do to make health care more accessible and affordable while awaiting a comprehensive federal plan to replace the current outdated, wasteful, access-denying, government-warped health care system. The authors recommend states take steps to verify Medicaid eligibility of program recipients and to require able-bodied recipients to work or perform other qualifying activities.
10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision
The health care research organization KFF examines options for states in the wake of the lifting of the federal government’s emergency pandemic restrictions on Medicaid eligibility redetermination.
HHSC Resumes Medicaid Eligibility Redeterminations as Continuous Coverage Requirement Ends
“The Texas Health and Human Services Commission is resuming eligibility redeterminations for approximately 5.9 million Medicaid recipients now that the federal Medicaid coverage requirement ended March 31,” the state’s HHS department announced on April 3, 2023. “Federal guidance requires states to conduct a renewal determination for all Medicaid recipients over a 12-month period, and HHSC anticipates it will complete this process by May 2024.”
Louisiana Plans to Spend $196 Million to Check Medicaid Enrollees’ Status
The Louisiana Illuminator reports on then-Gov. John Bel Edwards’ March 2023 proposal to spend $195.8 million to reach out to Medicaid enrollees and check whether they meet the qualifications for the public health insurance program during a massive Medicaid disenrollment over the next year.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.
S. T. Karnick is a senior fellow and director of publications for The Heartland Institute.
