Lawmakers discussed a bill on Thursday, tightening eligibility for the state’s Medicaid and Supplemental Nutrition Assistance Programs. Republicans have made the bill a priority. Lawmakers say it will root out waste, fraud and inefficiencies in Indiana’s welfare systems.
Bill co-author Sen. Chris Garten (R-Charlestown) said the measure will help bring Indiana in line with new requirements from the federal government, passed as part of the so-called big beautiful bill last year.
Under that law, starting in 2028, states will be on the hook to cover some of the cost of the SNAP program if they have a payment error rate above 6%. The payment error rate occurs when a state pays out less or more benefits than a household is supposed to get.
“Indiana's [SNAP] error rate is 9.5%,” Garten explained. “If we took that and had to pay an error payment rate, that's $143 million direct to the general [fund] that we would owe.”
For Medicaid, that penalty kicks in at an error rate of just 3% starting in 2030. Garten said that based on Indiana’s historic Medicaid error rates, the state could be on the hook for over two billion dollars if the error rate isn’t brought down.
To avoid possible penalty fees, the bill would bring Indiana in line with federal changes and set up regular eligibility checks for both SNAP and Medicaid.
Last year, Indiana reported over 400 million dollars in Medicaid savings, attributing the savings largely to increased eligibility checks and declining enrollment. However, advocates have warned that increased eligibility checks often serve as a barrier to people who still qualify but are unable to navigate the increased paperwork.
The bill also changes how the state counts an individual's assets before they receive benefits.
“If you've got $100,000 in your bank account, the taxpayer should not be paying for you,” Garten said.
Speaking to reporters after the committee, Garten said that about two-thirds of SB1 was focused on bringing Indiana in line with these new federal requirements.
The bill also aims to root out any people in Indiana with immigrant status who may be accessing benefits.
Under the big beautiful bill, many immigrants with legal status have been restricted from receiving public benefits, including asylees and refugees. People without legal status have not been able to apply for public benefits even before the bill's passage.
Indiana’s SB1 would require the immediate reporting to DHS of someone applying for benefits with an uncertain legal status.
“If you're an illegal alien in Indiana, we're going to report you to DHS, and I hope you're deported as fast as humanly possible,” Garten said.
But Emily Bryant with Feeding Indiana’s Hungry, argued that the bill added administrative burdens that would be costly. Bryant also underlined that the immigration language could impact a mixed-status family where a child may qualify for benefits, leading to a family member or parent inadvertently receiving support.
“We truly feel that this bill is going to add administrative cost to taxpayers and burdens to families who are at risk of hunger,” she said.
In committee, Garten admitted that he was unable to point to any specific numbers of people knowingly and improperly receiving benefits.
Democrats pushed back on the Republican framing of the bill.
Sen. Fady Qaddoura (D-Indianapolis), who ultimately voted in favor of the bill, took issue with the idea that it was an effort to root out massive fraud - asking several times if Indiana had a welfare fraud problem similar to what has been alleged in Minnesota.
Garten told Qaddoura he had no reason to believe Indiana had a fraud problem but instead saw the bill as a proactive step to keep Indiana’s welfare system intact.
Speaking with reporters after the bill’s passage out of committee, Qaddoura said his support was about ensuring Indiana was in line with federal law.
“My position on the bill is that there's currently a federal law that we have to be compliant with, and my laser focus is not about the noise of how they are messaging the bill, but rather on the compliance issue that potentially could cost Indiana losing hundreds of millions of dollars,” he said.
Other language in the bill addresses Medicaid work requirements and SNAP changes around candy and sugary drinks, ordered by Governor Mike Braun last year.
Contact Health and Government Reporter Benjamin Thorp at bthorp@wfyi.org