The Senate approved a social services bill, which is a Senate Republican priority and intended to address fraud, on Thursday.
Senate Bill 1, authored by State Sen. Chris Garten, R-Charlestown, was filed to prevent fraud and contain state spending on welfare programs because “Americans are outraged by the billions of dollars of welfare fraud in our nation — and the Minnesota scandal is Exhibit A,” according to a press release.
Minnesota has been under the spotlight for years for Medicaid fraud, including a massive $300 million pandemic fraud case involving the nonprofit Feeding Our Future. Prosecutors said it was the country’s largest COVID-19-related fraud scam and that defendants exploited a state-run, federally funded program intended to provide food for children.
In 2022, during President Joe Biden’s administration, 47 people were charged. The number of defendants has grown to 78 throughout the ongoing investigation. So far, 57 people have been convicted, either because they pleaded guilty or lost at trial.
In news interviews and press releases over the summer, then-federal prosecutor Joe Thompson estimated the total loss from all fraud cases could exceed $1 billion. Thompson left the U.S. Attorney’s Office in Minnesota last week over the way the investigation of the Jan. 7 shooting of Renee Good by ICE agent Jonathan Ross is being handled, according to the New York Times and Minnesota Star-Tribune.
Senate Bill 1 “is all about integrity,” Garten said, to ensure the state’s “safety net” remains sustainable “for those who truly need it.” Garten said the bill will align Indiana with H.R. 1, President Donald Trump’s federal budget bill, which cuts billions from Medicaid.
“Currently, loopholes and lax verification processes in federal programs like Medicaid and food stamps are allowing resources to leak out of the system. In recent months, we’ve witnessed the discovery of billions of dollars in welfare fraud across the country,” Garten said. “Every dollar that goes to a fraudster, or someone who is not legally eligible, is a dollar stolen from the truly vulnerable.”
The 24-page bill will end the state’s participation in the use of expanded categorical eligibility within the federal Supplemental Nutrition Assistance Program, set gross income standards and countable resources for SNAP eligibility, and establish immigration eligibility requirements for SNAP.
Undocumented immigrants are already ineligible for SNAP. The only non-citizens who may qualify are lawful permanent residents, or Green card holders; asylees; and other legal residents under temporary protected status, according to the Center for Budget and Policy Priorities.
Under the bill, if a SNAP applicant’s immigration status can’t be verified, the applicant’s information will be “immediately referred to the U.S. Department of Homeland Security for investigation and potential deportation proceedings,” Garten said in a release.
Senate Bill 1 also establishes the time frame for Medicaid eligibility re-determinations, and requires the Secretary of Family and Social Services to transmit certain information to the federal government to prevent multiple state Medicaid enrollments.
The bill further sets income requirements and modifies immigration status requirements for Medicaid, and requires FSSA to verify compliance to the requirements and report information to the federal government.
Under the Healthy Indiana Plan, the bill modifies work and exemption requirements and requires the conditions to be met in the three preceding months before an individual applies. The bill directs the FSSA Secretary to verify compliance with the work requirements on an ongoing basis and at least quarterly.
Senate Bill 1 removes the 12-month eligibility period for HIP and requires semiannual renewal, and it sets an additional copayment for the use of an emergency room for nonemergency services and other services under HIP.
The Senate Appropriations committee amended the bill to include that candy and soft drinks can’t be purchased with SNAP benefits. The amendment further establishes the Indiana Rural Health Transformation Fund.
State Sen. Fady Qaddoura, D-Indianapolis, said he disliked the way the bill was presented “in terms of the objects of the bill.”
While the bill has been pitched as a way to address fraud, Qaddoura said in the Senate Appropriations committee that he asked Family and Social Services Administration Secretary Mitch Roob if the office has seen fraud. Roob’s response was he didn’t know, Qaddoura said.
Qaddoura said he’s concerned about tainting Indiana’s reputation when a policy is pitched to stop fraud. That means, he said, either fraud existed and the state hadn’t done anything about it or the goal is to prevent fraud, which he would support.
“I support the policy concept of complying with federal law,” Qaddoura said. “Nowhere in this bill does it really address issues as was described as the policy objective, which is we’re combating fraud.”
State Sen. Shelli Yoder, D-Bloomington, said Indiana “does have work to do to respond to federal changes” under H.R. 1, which will cut billions of dollars from Medicaid over the next 10 years, among other benefit cuts.
Yoder said it was disappointing that the bill was first heard in the Senate Appropriations committee instead of the Health and Provider Services committee. Yoder said amendments to the bill were defeated on second reading, and a week after the bill was heard in committee it passed on third.
“I would like to get the language closer to what we can feel good about and that doesn’t potentially harm the sickest and those Hoosiers most in need of continuous care,” Yoder said. “The bill doesn’t just implement a federal framework. It hardcodes policy choices that increase the risk of coverage loss for people who are eligible.”
The bill passed 38-8, with State Sen. Rodney Pol Jr., D-Chesterton, and State Sen. David Niezgodski, D-South Bend, voting with all Republicans present in support of the bill.
Pol said he voted in favor of the bill because people who don’t qualify for benefits shouldn’t receive the benefits.
“I still have major concerns with the bill. I believe in the underlying intent of the bill,” Pol said. “We want to eliminate fraud and waste. I believe there’s a way this can be done without booting eligible people off benefits.”
As the bill moves forward to the House, Pol said he’d like to see it amended and he’s started sharing his thoughts with some House members.
For example, Pol said he’d like to ensure that medically frail people aren’t denied benefits preliminarily and to restore the SUN Bucks program, which was an amendment Qaddoura proposed for the bill on second reading but it failed.
Qaddoura’s amendment called for the state to establish its own SUN Bucks program, a federal program that ensures school-aged children receive food over the summer, for the summer of 2026 because the state didn’t apply to the program for this year. Then, the amendment would require the state to apply to the federal SUN Bucks program for 2027.
The SUN Bucks program was estimated to cost $4 million in administrative costs to distribute $80 million in federal funds to 669,000 hungry Hoosier children, Pol said.
“That is $76 million of partial Hoosier taxpayer dollars left in Washington D.C. to go to other states instead,” Pol said.
After the bill passed, Garten said in a statement that Indiana is “drawing a hard line in the sand: Indiana’s public safety net is for vulnerable legal residents.”
As Medicaid costs have increased to $5 billion over four years, Garten said Indiana has “a fiscal and moral duty to stop the bleeding.”
“We are restoring integrity to the system to ensure that these programs remain solvent and available for the Hoosiers who truly need them, while shutting the door on fraud and inefficiency,” Garten said.
