New estimate shows federal health care overhaul will cost Indiana $2.9 billion in next decade

New estimate says health plan to cost Ind. $2.9B

INDIANAPOLIS — A new estimate shows the federal health care overhaul will cost Indiana at least $2.9 billion over the next decade.

That estimate released Friday from an outside actuary hired by the state is lower than the actuary’s “worst case scenario” given two weeks ago. But Gov. Mitch Daniels said the burden to Indiana taxpayers is still enormous.

“Dollars that could have gone to public education or other purposes will be diverted to pay for this latest federal mandate, or taxes will be increased sharply, or both,” Daniels said.

The previous projection from Milliman Inc. said the state would have to spend an extra $3.6 billion in the next 10 years because of health care changes. That estimate assumed that the Medicaid program will enroll all eligible Indiana residents — federal estimates project only about 80 percent — and that they will drop existing private insurance through employers and other means for the government coverage.

Democratic Reps. Baron Hill and Andre Carson criticized the “worst case scenario” released in May and it was an attempt by Daniels to “politically assail health reform.”

“Presenting Hoosiers with misleading and inflated projections is not productive and detracts from the important work at hand,” Hill and Carson said in a joint statement.

So, Daniels said, a new report was run assuming less growth in Medicaid enrollment. The new estimate assumes Medicaid participation rates of 80 percent for uninsured adults and 50 percent for insured adults.

Daniels wrote in a letter to Hill and Carson that the new lowest-cost scenario assumes that “hundreds of thousands of eligible Hoosiers will decide to pay for something they can get for ‘free.’”

But Daniels said even an increase of $2.9 billion over 10 years is a huge blow to the state. Daniels said he personally favors the repeal of the health care overhaul, but that it’s his job as governor to deal with the “grim reality” of the situation.