Indiana legislative leaders ponder health costs

Republican Senate President Pro Tem David Long said the state no doubt would have to absorb some hidden expenses, even if the federal government sets up Indiana's online exchange allowing consumers and businesses to shop for insurance. That coupled with a potential Medicaid expansion could make the law a long-term burden on Indiana taxpayers, he said.

"It's absolutely a freight train coming down the tracks that's going to be shoved off on the states. And a lot of the cost has to do with the situation in Washington," he said, adding that Washington's budget woes make it more likely states will bear the burden of the sweeping law.

The Republican and Democratic leaders of the General Assembly spoke Monday at a forum hosted by the Indiana Chamber of Commerce.

Gov.-elect Mike Pence opposes the state running its own insurance exchange. The federal government would build one for the state if he declines a partnership with the federal government by February.

But even though his rhetoric against President Barack Obama's signature legislation remains sharp, Pence may not be ruling out a state-run exchange long-term. Republican House Speaker Brian Bosma says Pence has told him the state could retake control of the exchange after a year if it works well.

The Legislature will have a full plate when it begins work in earnest starting January. Besides questions about health care, lawmakers must craft the next biennial budget, address educations and jobs proposals and consider whether to write Indiana's gay marriage ban into the state constitution.

Lawmakers enter the 2013 session with roughly $2 billion in cash reserves and a proposal from Pence to use at least part of that money to cut the personal income tax by 10 percent. But Long cautioned that gambling income from the state's riverboat casinos and slots operations has been declining, and Bosma said it would be hard to commit to very much new spending or tax cuts because "the fiscal fog is thick."

The actuary hired by the state, Milliman, estimated in September that even if the state decided not to expand Medicaid coverage, the health care law could cause poor residents not already covered by Medicaid to be forced out of the "woodwork" by the requirement that they be insured. That alone would cost roughly $612 million over seven years.

"I think there has been some discussion about whether those figures are completely accurate, whether they take into account some of the savings that also might be reaped from the implementation," said Democratic Senate Minority Leader Tim Lanane. "There is controversy as to exactly how reliable those figures are."

Republicans in control of the Senate and House also will have to deal with a new school superintendent who campaigned against many of the education changes approved the last few years. Democrat Glenda Ritz is replacing Republican Tony Bennett, a staunch advocate of the GOP's education overhaul.

Bosma pointed out that many of those new changes, including a sweeping school voucher system and merit pay for teachers, are already in the books. But she could have sway over how those laws are placed into practice, he said.

"The reforms will not be rolled back," he said. "That doesn't mean we can't have a conversation about how they will be implemented. I think we've all had some reservation about them."

One proposal being considered by lawmakers would make the state school superintendent a position appointed by the governor, but Bosma cautioned the day after the election that he would like to talk to Ritz first before making any changes.