The logic is simple: If you can’t win on policy or public support, you try to win with semantics and confusion.
Jay Chaudhary
| Opinion Contributor
House passes spending bill — Here’s what’s in it
The House passed a spending bill that would raise the deficit and could put Medicaid in danger.
Even by government standards, Medicaid is notoriously complex — an intricate web of carve-outs, cross-subsidies, and shared state-federal financial responsibilities. I once heard the funding structure of a particular Indiana Medicaid program described as “a house of cards built on top of a shell game,” which feels like a fair description of Medicaid as a whole.
At the same time, Medicaid — especially Medicaid expansion under the Affordable Care Act (commonly known as Obamacare) — is widely popular. This puts conservatives seeking to cut the program in a bind: They must find a way to undermine it without directly attacking something voters support. The program’s bureaucratic complexity provides that opening.
President Trump and congressional Republicans have ruled out major structural changes to Medicaid, instead focusing on cutting more arcane and opaque features of the program, such as eliminating states’ ability to use provider taxes.
Hicks: Indiana’s startling Medicaid math forces unpleasant choices
Provider taxes are levies imposed by states on health care providers to help cover Medicaid expansion costs. They are critical to funding Medicaid expansion in many states, including Indiana. The ability to impose these taxes is essential for maintaining state support of Medicaid expansion. To justify eliminating these arrangements, opponents have labeled them as waste, fraud or abuse, using loaded phrases like “money laundering” or “bribery.”
It is fair to critique provider taxes as bad public policy, that they are overly complex and/or create significant disincentives for fiscal restraint. However, these mechanisms are a legitimate exercise of state taxation power on actual commerce within state borders, not a nefarious backroom scheme to defraud taxpayers.
This push to end provider taxes is a prime example of using bureaucratic complexity as a smokescreen for deep cuts to the program. By framing it as a technical adjustment that merely enhances efficiency, rather than a direct funding reduction, Congress can obscure the real impact: jeopardizing Medicaid expansion and restricting access to care for millions of Americans.
The logic is simple: If you can’t win on policy or public support, you try to win with semantics and confusion.
Healthy Indiana Plan could reduce care for hundreds of thousands
Indiana’s version of the provider tax, the Hospital Assessment Fee, plays a crucial role in funding Medicaid by generating federal matching funds. This money is essential for maintaining hospital reimbursement rates and supporting the Healthy Indiana Plan, the state’s Medicaid expansion program under Obamacare. The HAF allows Indiana to sustain and expand access to care without relying entirely on state general fund dollars.
The HAF generates over $1 billion annually, bringing in additional federal money that hospitals rely on to care for Medicaid patients. With state lawmakers already concerned about rising Medicaid costs, finding an additional $1 billion to sustain HIP could be an insurmountable challenge.
Eliminating the provider tax may sound like a mild technocratic tweak, but in reality, it would gut Medicaid expansion, destabilize hospital finances, and reduce access to care for hundreds of thousands of Hoosiers. By branding these changes as a crackdown on “waste,” politicians can claim to be protecting taxpayers while sidestepping responsibility for the millions who could lose health care access.
A major threat to addiction services
Over the past decade, Indiana has significantly expanded access to addiction treatment, including residential care, medication-assisted treatment and peer support, leading to one of the largest drops in overdose deaths nationwide.
The heroic Hoosier recovery community deserves the most credit for these wins, and HIP is the policy and programmatic foundation that makes it possible. Traditional Medicaid primarily covers the aged, blind, and disabled. Medicaid expansion programs (like HIP) extend coverage to a broader low-income population.
Most individuals with substance use disorder are both low-income and not classified as disabled, meaning they would have no access to care without Medicaid expansion. The elimination of the HAF — and the likely cuts to HIP that would follow — would reverse Indiana’s progress, severely undermining our fight against addiction.
It is reasonable to argue that addressing the national debt may require difficult choices, including potential limits on Medicaid spending (although that argument is severely undermined when accompanied by a deficit-exploding tax cut).
Likewise, a philosophical debate about the government’s role in health care or Medicaid expansion’s mixed track record on health outcomes is a legitimate discussion. But, if lawmakers want to debate Medicaid expansion, they should do so transparently, without disguising significant cuts as routine and harmless policy adjustments.
Jay Chaudhary is the former director of the Indiana Division of Mental Health and Addiction and former chair of the Indiana Behavioral Health Commission.
