Lawmakers brace for health law, potential costs

Indiana lawmakers can add confusion over the federal health insurance law to their already overflowing plate when they return for their 2013 legislative session in January.

If it wasn't an issue in Indiana's 2012 Statehouse races, it quickly became an issue for the victors when President Barack Obama was re-elected, dashing any hopes of repealing the measure and leaving states with an immediate deadline for answering how they would build the exchanges through which residents will buy insurance plans.

Republican House Speaker Brian Bosma punctuated its importance last week when he tapped the top health policy expert in his caucus to run the House's most powerful committee next session. State Rep. Tim Brown, a Crawfordsville physician, will move from his post atop the House public health committee to run the budget-writing House Ways and Means Committee.

"With so much of the state's focus not only currently, but in the next several years, being on health care and health care-related initiatives including the affordable care act — which many hoped would be just a fond memory after Nov. 6 — it's clear that the role of health care is taking an increasing role in the Ways and Means Committee," Bosma said in introducing Brown.

Governor-elect Mike Pence answered an immediate question last week when he said Indiana would not run its own exchange and effectively shut the door on running an exchange in cooperation with the federal government. But he has until Feb. 16 to actually close that door.

Pence's antipathy to the federal health care law is well-known and has been starkly put before. Last summer, he compared the Supreme Court ruling affirming the law to the Sept. 11 terrorist attacks in a closed-door meeting of congressional Republicans. He later apologized for the remark.

But even some of the nation's most conservative governors, including Wisconsin's Scott Walker and Florida's Rick Scott, have warmed to the idea of building a hybrid exchange in partnership with the federal government.

A bigger question may stand for lawmakers tasked with writing the budget: Will Indiana expand its Medicaid roles via the federal law? The Supreme Court struck down a provision of the law requiring that states accept additional residents into the federal program.

Indiana's Medicaid actuary, the group providing detailed analysis for Gov. Mitch Daniels' administration, tagged the cost of doing nothing at $612 million combined over seven years based on an assumed "woodwork effect": poor residents are driven out of the "woodwork" by the individual mandate to seek Medicaid coverage and other residents are dropped from their employers' health care plans.

Milliman, the state's actuary, estimated that a full expansion of Medicaid would cost the state $2.6 billion over that same time.

Former Senate Minority Leader Vi Simpson, a Bloomington Democrat, questioned the validity of the report, noting that it leaves out estimated savings from spreading risk across a greater pool of insured residents — the key concept Democrats have argued would "bend the cost curve" of unmitigated health insurance premium spikes in the last decade or so.

"What we really need are cost estimates from a third party that's unassociated with, or independent of the state, in order to get real numbers," said Simpson, who studied the federal law before running with Democrat John Gregg against Pence.

But any increase in spending is likely to ruffle lawmakers eyeing another two years of austere growth in tax collections matched with increasing demands from state agencies and universities that tightened their belts in recent years.

And questions about the actual cost of the law are met with even more questions from confounded lawmakers who say they can't get a straight response from the federal government.

"I don't know if the General Assembly is ready to take any action," said Sen. Pat Miller, chairwoman of the Senate's health committee. "If we could get some of our questions answered, I could tell you."

Some of lawmakers' key concerns, Miller said, deal with the level of coverage from any plan and details like whether adult and children's dental visits will be paid for.

As the questions continue to swirl, one thing is clear: Indiana's lawmakers are bracing for something big. They're just not sure exactly what yet.