A Medicaid study committee made no recommendations this year—despite a funding shortfall

Indiana Statehouse

A year the Holcomb administration revealed a shortfall in the state’s Medicaid program of nearly $1 billion, lawmakers will start working in January to piece together legislation that at least in part deals with the second-largest and fastest-growing item in the state budget.

Lawmakers haven’t said how they plan to tackle the issue yet, and several have said Medicaid is so complicated and expansive it’s hard to know how to start without new forecasts for state tax revenue and Medicaid spending. The State Budget Committee will hear those on Tuesday.

But one group that some special interest groups and budget watchers had thought would start sifting through the details was the Medicaid Oversight Committee, a study committee whose purpose is to review, debate and make recommendations regarding new or existing services for the Medicaid program.

However, for its second consecutive year, the committee didn’t release any recommendations—and this year had only one meeting, on Aug. 27. To some, including the Indiana Fiscal Policy Institute, the lack of action raised eyebrows. The group called it a curious decision.

The committee’s chair, Rep. Brad Barrett, R-Richmond, and vice chair, Sen. Ryan Mishler, R-Bremen, did respond to IBJ’s request for comments about the lack of recommendations or further meetings.

But former state Sen. Luke Kenley,  a Noblesville Republican who chaired the Senate Appropriations Committee, said it’s not an unusual for a panel studying an issue as thorny as Medicaid to decline to make recommendations. Kenley said the committee was just a starting point for a solution to encourage that conversation.

Medicaid enrollment grew significantly during the pandemic when the federal government blocked states from kicking users off the program, even if they no longer met eligibility guidelines, and incentivized states to expand the program by paying for a larger share of it.

Once that temporary funding ended, Indiana—and other states—rolled back the expansions, but they found that more residents remained eligible than expected.

Kenley said committee members are likely holding private meetings to analyze the issue, debate and come up with answers. The lawmakers Kenley said he’s talked to who are intimately involved in fiscal discussions understand how important this issue is.

One reason lawmakers might not be taking action is that political leaders of the Legislature “are still trying to figure out what they think the public is in favor of or is willing to accept at this point,” Kenley said. “Until they can perceive a little better how the thing is going to be reacted to, they’re afraid to take a step.”

And it often takes time to observe these issues before come up with an adequate solution, he said. And the federal government’s stake can also complicate decision-making, he said.

“I do not want to speculate, but part of the hesitancy of having real discussions about Medicaid funding is that there are no easy ways to contain spending that do not impact recipients and providers of the program from a business viability standpoint,” said Rep. Greg Porter, D-Indianapolis, in a statement to IBJ.

Porter, one of two Democrats on the six-lawmaker Medicaid study committee, said he too is concerned about why there weren’t additional meetings or recommendations. He said he was not given a reason why the committee took so little action.

Study committee recommendations are just that—recommendations. Sometimes they result in legislation; often they don’t. Kenley said even if the Medicaid committee had suggested specific policies, they would have been debated inside Republican caucuses before they would have been introduced as legislation. Those conversations will be going on regardless.

Also, Kenley said, it’s unlikely the issues with Medicaid will be solved in one session. To tackle an issue that’s so encompassing, Kenley said, Senate Tax and Fiscal Policy Chair Travis Holdman, R-Markle, and House Ways and Means Chair Jeff Thompson, R-Lizton, will likely break legislation into several steps, with the first taken in 2025.

The General Assembly will reconvene on Jan. 8 to begin official business and build the 2026-2027 budget—which will take effect July 1, the beginning of Indiana’s 2026 fiscal year.