Over the course of a decade, Indiana’s per-enrollee costs for certain Medicaid recipients are expected to surge by 43% and 72% for lower-income and elderly Hoosiers, respectively.
That’s according to an analysis by the Family and Social Services Administration shared on Wednesday by Secretary Mitch Roob, who is leading the agency for a second time. Another agency leader also provided an update on state child care costs during an hours-long quarterly fiscal update.
Expenses for Healthy Indiana Plan enrollees could grow from $2.9 billion in 2017 to $7.5 billion in 2027 — while per-enrollee costs grow from $7,403 and $10,599, or 43%.
View the presentations from all six of FSSA’s offices that presented on Wednesday here.
“Now, that’s a lot of money, but those dollars are primarily funded through the hospital assessment fee,” Roob said. “So, candidly, the General Assembly is less concerned about the cost-growth trajectory.”
The same can’t be said for elderly Hoosiers in fee-for-service programs or enrolled in Pathways for Aging. Those costs will increase from $4.2 billion to $11.3 billion. That per-enrollee growth is projected to increase by 72% from $12,261 in 2017 to $21,077 in 2027.
“We’re going to have to focus on ‘How do we create a care model that we can afford for this patient population?’” said Roob. “Because we can’t afford that amount.”
Over that same time frame, state Medicaid appropriations are expected to more than double from $2.1 billion to nearly $5 billion. By 2030, one in five Hoosiers is projected to be at retirement age when they’re more likely to rely on government programs like Medicaid.
The surge in Applied Behavior Analysis therapy and reliance on attendant care services — for both the elderly and disabled — also inflates the state’s Medicaid costs. Roob noted that Federally Qualified Health Centers and hospitals have also grown more expensive, “even as our health care outcomes as a state have not moved nearly as much.”
In the past, Roob said the agency typically budgeted by estimating how much services would cost and accounting for various funding streams. The gap between expenses and revenues would then be closed by the state’s general fund.
In 2023, the state contributed nearly $3 billion, or just over 16% of FSSA’s $18 billion budget. The $4 billion in 2025 was nearly 21% of the $20 billion budget.
But, going forward, the agency will work backwards by assuming the state would only contribute 2%, shrinking the overall budget.
“When the revenue forecast came out … the General Assembly said, ‘You’re going to have to make do with $250 million less. And we put together a plan to get there,” Roob said. “… (We) ended Medicaid advertising; we’re reducing administrative contracts.”
Other cuts include discontinuing Temporary Assistance for Needy Families funding for the Jobs for America’s Graduates program, cancelling several vendor contracts for child care offices and analyzing ABA therapy costs.
“We’re going to solve for 2% … because that’s all we can afford,” said Roob to the assembled audience. “We’re going to work very hard, and we’re going to have to work with each and everyone of you to find ways to live inside that 2% number.”
Child care
The Office of Early Childhood and Out-of-School Learning doesn’t anticipate it will issue any new child care vouchers in the 2025 calendar, a blow to the low-income parents relying on the program. The state implemented a waitlist for the subsidized care in December 2025.
“Since then, we have not enrolled a new child on vouchers,” said Adam Alson, adding that enrollment is expected to continue to fall.
Alson, the office’s director, previously outlined the state actions bringing Indiana to this moment, which saw a steep surge in funding during the COVID-19 pandemic but sharply fell more recently. But the Child Care and Development Fund, or CCDF, vouchers are accepted by more than 90% of the state’s child care providers — even as enrollment falls from a 2024 high of 70,000 to roughly 55,000.
“In the state of Indiana, these vouchers are ones that are consistent revenue streams for child care providers and are one of the major backstops for general child care supply in Indiana,” said Alson, emphasizing the importance of the funds for families, children and employers.
Lawmakers dedicated one-time funding of $147 million to support current families utilizing the vouchers, but trimmed the overall line item for CCDF to just $39 million annually.
Alson called the funding of CCDF vouchers “a long-term problem” for his office, saying it would prioritize fiscal responsibility and “eventually restarting CCDF.”
To protect its remaining funding, FSSA has amended, cancelled or declined to renew nearly $222.7 million in child care-related contracts with various outside companies, including ones to staff call centers.
Doing so shrinks the office’s total spend on contracts from 17% of its overall budget to 10%, Alson shared.
Federal impacts
The passage of President Donald Trump’s priority budget package presents an opportunity — and a loss — for Hoosiers.
Under the new law, Indiana will pay roughly $50 million more in administrative costs for the Supplemental Nutrition Assistance Program, primarily due to its error rate. That increased cost will come in fall 2026, after the state implements a new rule banning the purchase of soda and candy using SNAP benefits.
“We obviously are not going to get rid of SNAP,” Roob emphasized. “SNAP is too viable a component for those who are food insecure in Indiana.”
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But the state hopes to get a slice of a $50 billion hospital fund under the new law that was established to offset any potential negative impacts to rural providers due to Medicaid restrictions. Roob announced that the state will seek around $200 million over five years with a working group drafting an application.
Those dollars could be directed to developing more value-based care arrangements and alternative payment models alongside rural practitioner recruitment and retainment. Additionally, it can be invested in telehealth, remote monitoring and AI-driven care or support substance abuse and mental health treatment.
Congress also opted to include language capping provider taxes, which Indiana and other states use to leverage higher payments from the federal government. These provider taxes, along with taxes on cigarettes, pay for the state’s 10% share of costs under the Healthy Indiana Plan, or HIP.
But FSSA hopes to bring home one last round of provider tax funding before Trump’s bill is enacted, giving the state a temporary boost, which Roob likened to “The Last Buffalo Hunt,” an 1880s event that signifies the animal’s near-extinction.
“Whatever money we get back, however good or bad Gov. (Mike) Braun and I are going to (Washington) D.C. and capturing this federal money — that’s the money we have to spend,” said Roob. “That’s why it’s the last buffalo.”
The federal government is still considering Indiana’s waiver application to reform HIP, which is a Medicaid expansion program covering low- to moderate-income Hoosiers. Roob shared the pillars of HIP 3.0, including: work requirements effective July 1, 2026; a benefits package incentivizing regular check-ups and preventative care; and cost-sharing initiatives for members.
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