[r82] Indiana education can't afford ObamaCare (4/27/2010)

Tuesday, April 27, 2010

Start Date: 4/27/2010 All Day
End Date: 4/27/2010

After watching the proceedings in Washington D.C., I feel compelled to let my fellow citizens know how the federal health insurance reform bill will impact Indiana. We already have a tight budget and now the spending mandates contained in the bill will likely lead to further cuts to K-12 education. 

The nearly 2,500 page health insurance reform bill was signed into law last week by the President, and it pushes our country one giant step closer to a system of socialized healthcare.  The price tag for ObamaCare is astronomic, but the real cost is paid not by the federal government but by the people through unfunded mandates and increased taxes on businesses and individuals.

As a fiscal leader in the Indiana House of Representatives, it is my job to keep a close eye on Indiana's finances.  Needles to say, I am extremely concerned about how the spending mandates contained within the bill will impact Hoosier taxpayers. 

The most talked about provisions of the bill, such as an expansion of Medicaid coverage to 1 in every 4 Hoosiers and the mandatory creation of health insurance exchanges, take effect in 2014 and will cost Indiana tens of millions of dollars to set up and administer. 

In addition, the expansion of the Medicaid program will likely force the state to increase fees paid to doctors in order to ensure that the supply of health care for Medicaid recipients will meet the demand.  Even a small increase in these fees could cost Hoosier taxpayers millions of dollars. 

While the major components of the bill will hit Indiana several years down the road, there is at least one provision that represents a huge cost to the state starting this year.  Indiana's Medicaid program is a major purchaser of pharmaceuticals, and the state has successfully negotiated one of the most favorable pharmaceutical rebate programs in the nation. We receive more rebates than the minimum required by the federal government, and the difference accrues to the state and creates savings for Hoosier taxpayers.

Now, under the health insurance reform legislation, the federal government will confiscate a large portion of these rebates.  In fact, it is estimated that this provision alone will cost Indiana $25 million this year and over $400 million over the next ten years.

There is no question that Hoosiers-and all Americans-are currently experiencing one of the worst economic downturns in decades, and state government is in no way immune from effects of the recession.  Our tax revenues are down significantly, and state fiscal leaders are working every day to keep the state financially solvent without crippling vital government services or increasing taxes.

Currently, 54% of Indiana's budget goes to K-12 education, making it by far the largest recipient of funding.  The state will do all it can to avoid further cuts to education, but the new spending mandates forced upon us by ObamaCare may make further cuts unavoidable.  Our resources are limited, and every dollar spent on ObamaCare at the state level is one less dollar that can be used for something else, including K-12 education.