The man who runs Indiana's Medicaid program has a warning for lawmakers: a hospital fee that helps pay for health coverage for hundreds of thousands of working Hoosiers is about to be cut, and the state needs to start planning now.
"These numbers are more dire than I would like them to be," Mitch Roob, Indiana's secretary of Family and Social Services, said at a quarterly financial meeting on Tuesday, the Indiana Capital Chronicle reported.
The cut comes from Trump's budget bill. Every Republican Indiana sends to the U.S. House voted for it: Jim Baird, Erin Houchin, Mark Messmer, Jefferson Shreve, Victoria Spartz, Marlin Stutzman and Rudy Yakym. They voted yes when it first passed the House in May 2025, and yes again when it came back for final passage in July. Indiana's two House Democrats voted no both times.
The fee that pays for the Healthy Indiana Plan
Indiana charges its hospitals a fee. The state uses that fee to draw down extra federal Medicaid money for hospitals, and it keeps part of it to pay its share of the Healthy Indiana Plan.
That plan covers hundreds of thousands of working-age adults who earn a little too much for traditional Medicaid, along with pregnant women, low-income caretakers and others.
Right now the fee is set at 6%. Trump's budget bill forces it down. Starting late next year, the law steps the fee down every year until it reaches 3.5% in late 2031, a schedule that applies to every state that expanded Medicaid.
What 3.5% means in dollars
Last budget year, which ended in June, Indiana brought in more than $2 billion from the 6% fee and related transfers. Early projections Roob presented, produced with the consultant Deloitte, show that at 3.5% the state would have lost roughly $900 million, or about 40% of what it collected.
"That's the purchasing power decline that we're going to see by 2032," Roob said.
He said Indiana has to plan for the hit now, "so we don't end up in a situation where we have to reduce rates or reduce eligibility." Cutting rates means paying doctors and hospitals less for treating Medicaid patients. Cutting eligibility means dropping people from coverage.
Roob doesn't think the state can cut its way out of this. "We've got to find better care models," he said. "I don't know what that is."
It's not the only bill coming due
The fee phase-down is just one way the budget bill pushes health care costs onto states. Nationally, we've reported that the law will likely force states to cut Medicaid payments to doctors and hospitals by more than $50 billion a year. The same law also raises the share states pay for other parts of Medicaid and for food assistance, the Chronicle reported.
And the coverage cuts have already started in Indiana before this one arrives:
- Indiana's own Medicaid agency says 58,000 people on the Healthy Indiana Plan already don't meet the federal work rule that takes effect January 1. All seven of these Republicans voted for the law that created that rule too.
- Indiana has dropped more of its children from Medicaid than any other state.
What each of them voted for
Here are the seven Indiana Republicans who voted for the bill, and whose voters stand to lose coverage if the state has to cut eligibility:
- Jim Baird (4th District)
- Erin Houchin (9th District)
- Mark Messmer (8th District)
- Jefferson Shreve (6th District)
- Victoria Spartz (5th District)
- Marlin Stutzman (3rd District)
- Rudy Yakym (2nd District)
Every one of them is on the ballot on November 3.
What the record shows
All seven of Indiana's House Republicans voted twice for Trump's budget bill, which forces Indiana's hospital fee down from 6% to 3.5% by late 2031. That fee helps pay for the Healthy Indiana Plan, which covers hundreds of thousands of working Hoosiers. Indiana's Medicaid chief says the lower rate would have cost the state roughly $900 million, about 40% of last year's collections, and is warning that rate or eligibility cuts could follow.
