A Senate bill aimed at tackling welfare fraud passed out of the House Monday as the Indiana legislature begins its final week of the 2026 legislative session.
Senate Bill 1, authored by State Sen. Chris Garten, R-Charlestown, was filed with the intent 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 in January 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.
Garten said the purpose of the bill is to close loopholes within Medicaid and Supplemental Nutrition Assistance Program as well as complying with federal requirements under President Donald Trump’s budget bill that passed over the summer.
“By tightening these loopholes and aligning our programs with federal law we guarantee that our safety net remains sustainable for the poor, the disabled, our elderly and our Hoosier children who rely on it and need it the most,” Garten previously said.
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.
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 news release.
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.
Senate Bill 1 also shortens the timeframe for Medicaid eligibility redeterminations, 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 for Medicaid, and modifies immigration status requirements for Medicaid, including presumptive eligibility, including an increase to 80 hours of work or volunteering per month, and the Healthy Indiana Plan, and requires the office to verify compliance of the requirements and report information to the federal government.
Under HIP, 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 Secretary of Family and Social Services 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.
State Rep. Brad Barrett, R-Richmond, said Senate Bill 1 continues the work the legislature started under HIP 1.0, where the state expanded Medicaid to beyond federal poverty requirements. Then, under HIP 2.0, the state expanded the Medicaid program further by expanding the income requirements and adding waivers, Barrett said.
Senate Bill 1 “is the genesis” of HIP 3.0, Barrett said.
“I look at this as an effort to maintain sustainability of a program that’s been expanded and has been, in fact, quite lucrative in taking care of patients in this arena,” Barrett said.
While the bill was heard in committees, many speakers mentioned that the bill aims to align with the Medicaid changes in President Donald Trump’s budget bill. Barrett said there are elements of the bill that are “tougher” or “looser” than the federal budget bill.
“It’s really been very complicated in terms of keeping track of what are (the) federal policies that we need to codify and then what have we chosen to do as a state to maintain the sustainability of this product,” Barrett said.
State Rep. Mitch Gore, D-Indianapolis, asked Barrett if there is fraud in Indiana’s Medicaid and SNAP programs. Barrett said there is fraud in both programs, citing an FSSA report finding upward of $10 million that the department “could retrieve and save for the state” between both programs.
State Rep. Robin Shackleford, D-Indianapolis, said she was concerned about requiring that people comply with the work requirements for three months before applying for Medicaid.
“Usually, when people are applying for Medicaid, they need help. That means that they have either lost their job, they’ve come down with an illness or their work hours have been reduced. There’s no way that people will be able to apply for Medicaid and already have met the requirements three months prior,” Shackleford said.
Shackleford said she was also opposed to reducing the asset limit for SNAP benefits, which the legislature voted in 2017 to maintain at a $5,000 level.
As the bill heads to a conference committee, since it was amended slightly in the House, Shackleford said she hoped the concerns she raised would be addressed.
State Rep. Cherrish Pryor, D-Indianapolis, said Senate Bill 1 will mean that fewer people will receive healthcare coverage, which won’t save the state money as those people go to emergency rooms to seek care when things become critical.
“It’s not that we’re not paying, we’re paying another way. If they go to the emergency rooms, there’s going to be a bill and that bill is going to fall back on taxpayers. All we’re doing is delaying the payment of a bill at the expense and at the health of fellow Hoosiers,” Pryor said.
The bill passed 62-31, with State Reps. Becky Cash, R-Zionsville, Ed Clere, R-New Albany, Dave Hall, R-Norman, and Ben Smaltz, R-Auburn, voting with all Democrats present against the bill.
When the bill was heard in the House Ways and Means committee last week, it was amended to require the Indiana Family and Social Services Administration Secretary to file a written report to the budget committee with expenditures of money in the Indiana Rural Health Transformation Fund. On second reading, also held last week, the House amended the bill with a technical correction.
Since the bill was amended in the House, it will go back to the Senate for final approval before heading to the governor’s desk for signature.
akukulka@post-trib.com
