Restoring the Integrity of Medicaid in Indiana

Medicaid is at the forefront of the healthcare policy debate. The program takes up around one third of most state budgets, meaning changes to eligibility or coverage have a significant impact on how much states are expected to spend. Medicaid expansion has caused the cost of maintaining the program to soar, and many states are facing significant budget challenges as a result. However, states are working on solutions. Indiana’s Senate Bill 2 is one such bill that could serve as a model for other states.

Indiana’s SB 2 eliminates self-attestation for Medicaid eligibility requirements and requires cross-checks of eligibility information against various government databases done monthly, quarterly, or annually, depending on the source. This will include checks of federal tax data, which are often the best tool for identifying fraud. SB 2 also requires the Indiana Family and Social Services Administration to submit regular reports to the Medicaid oversight committee regarding improper payments, fraud, and fund recovery.

With this legislation, Indiana joins the handful of states that have instituted work requirements for Medicaid eligibility. Participants who do not fall into one of the eleven exemption categories will be required to work at least 20 hours per week. The requirement can be met through a combination of work and volunteer activities.

As with all government programs, Medicaid has become bloated, weighed down by fraud and waste. Over the last 10 years, government reports show Medicaid issued $543 billion in improper payments, the vast majority of which (79%) were the result of insufficient evidence or failure to verify eligibility. Fortunately, the House Energy and Commerce Committee’s budget reconciliation proposal includes Medicaid reforms that will help states restore Medicaid integrity and ensure the program is serving those who truly need it the most.

ALEC has long opposed Medicaid expansion and predicted the soaring costs and enrollment that states have seen as a result. As states around the country start to look for ways to address the budget challenges from Medicaid expansion, Indiana’s legislation is an excellent example of a solution based on good government and financial stewardship.