Indiana Medicaid Restructuring Bill Sparks Debate Over Long-Term Care Savings

Proposed changes to the state's Pathways for Aging program draw pushback from providers and state officials

Published on Feb. 13, 2026

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A bill to restructure Indiana's Medicaid program for long-term services and supports has sparked emotional debate, with providers arguing it would reduce administrative costs and expand access to lower-cost care settings, while state officials warn it could undermine care coordination efforts and fail to deliver promised savings.

Why it matters

The debate highlights the ongoing challenges in balancing Medicaid spending, care quality, and access to services for Indiana's aging population. The outcome could have significant implications for the state's management of long-term care costs and the ability of seniors to access the services they need.

The details

House Bill 1277 would move long-stay nursing home residents from managed care back to traditional fee-for-service Medicaid, impose cost limits on certain home- and community-based services, and create a separate assisted living waiver. Supporters argue this would reduce administrative overhead paid to managed care companies and better align services with patient needs. However, the state's top Medicaid official disputed the projected savings, warning that unraveling key components of the Pathways model could shift costs rather than reduce them.

  • The Pathways for Aging program began enrolling members in 2024.
  • The state's Medicaid waiver waitlist for home-based and community services now exceeds 17,000 people.
  • The bill must pass the full Senate before the Feb. 19 committee deadline, with lawmakers scheduled to conclude the short session by the end of February.

The players

House Bill 1277

A bill authored by Rep. Brad Barrett, R-Richmond, that would make significant changes to Indiana's Pathways for Aging Medicaid program.

Mitch Roob

The secretary of Indiana's Family and Social Services Administration, who pushed back against the bill's projected savings and warned that unraveling key components of the Pathways model could destabilize the state's broader managed care structure.

Nick Goodwin

The director of government affairs for the Indiana Health Care Association, who argued the bill would save more than $100 million in Medicaid funding per year by eliminating overhead payments to managed care entities.

Yvonne Tanner

A registered nurse with Brickyard Healthcare, who argued that for long-stay nursing home residents, the responsibilities of managed care coordinators are already handled by in-house clinical staff.

Julie Simpkins

The co-CEO of Gardant Management Solutions, an assisted living company, who said assisted living serves Medicaid-eligible seniors 'at 40% of the cost' of nursing homes.

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What they’re saying

“We're trying to find ways to save money and function more efficiently.”

— Brad Barrett, State Representative (wishtv.com)

“If I believed that this bill would result in savings, I would take them. If I believed that this bill would result in higher quality of care, I would do that. Unfortunately, I do not.”

— Mitch Roob, Secretary, Indiana Family and Social Services Administration (wishtv.com)

“The notion that we're saving money on the 100-day limit, I think, is an illusion. If you pull that member from them, that overhead will simply shift someplace else.”

— Mitch Roob, Secretary, Indiana Family and Social Services Administration (wishtv.com)

What’s next

The Senate Appropriations Committee is expected to consider amendments and a vote to advance the legislation to the full Senate next week, ahead of the Feb. 19 committee deadline.

The takeaway

The debate over Indiana's Medicaid restructuring bill highlights the ongoing challenges in balancing long-term care costs, quality of services, and access for the state's aging population. The outcome could have significant implications for how Indiana manages its Medicaid program and the ability of seniors to receive the care they need.