Indiana Urged to Exempt Community Health Centers from Proposed Medicaid 340B Change

Proposed policy change could strip local resources from clinics while sending most of the financial benefit to the federal government.

Apr. 8, 2026 at 12:44pm

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Indiana's community health centers are urging the state to exempt Federally Qualified Health Centers (FQHCs) and FQHC Look-Alikes from a proposed Medicaid 340B change. The 340B program provides drug discounts to eligible safety-net providers, and the centers use those savings to keep medications affordable and support wraparound services. However, under the proposed change, Indiana would have to share over 64% of any rebate dollars with the federal government, meaning Washington would be the biggest financial beneficiary, not Indiana communities.

Why it matters

Community health centers are a critical part of Indiana's healthcare system, serving patients regardless of their ability to pay. The 340B program allows these centers to reinvest savings into affordable medications, pharmacy access, and other services that improve patient health and reduce pressure on the broader healthcare system. Weakening this resource could negatively impact access to care, especially in underserved areas.

The details

The proposed Medicaid 340B change would strip local care resources from Indiana clinics while sending most of the financial benefit to the federal government. Because Medicaid is a federal-state partnership, federal rules mean Indiana would have to share over 64% of any rebate dollars with Washington, making the federal government the biggest winner, not Indiana communities.

  • The proposed Medicaid 340B change was announced in April 2026.

The players

Ben Harvey

President and CEO of the Indiana Primary Health Care Association, which represents the state's community health centers.

Governor Braun

The governor of Indiana who has made healthcare affordability, access, and rural care central themes of his agenda.

Indiana Primary Health Care Association

The organization representing Indiana's community health centers, which provide high-quality primary care and related services to patients across the state, regardless of insurance status or ability to pay.

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What they’re saying

“This is not a taxpayer-savings plan. It is a Washington-wins, Indiana-loses proposal.”

— Ben Harvey, President and CEO, Indiana Primary Health Care Association

“Indiana would be taking a proven, locally reinvested resource away from community health centers so that most of the financial upside can leave the state. That is the wrong answer for patients, for access, and for common sense.”

— Ben Harvey, President and CEO, Indiana Primary Health Care Association

What’s next

Governor Braun and state officials will decide whether to exempt FQHCs and FQHC Look-Alikes from the proposed Medicaid 340B change.

The takeaway

This proposed policy change risks undermining the ability of Indiana's community health centers to provide affordable medications and critical wraparound services to vulnerable patients, all while sending the majority of the financial benefit to the federal government instead of local communities.