Indiana lawmakers differ on what should be done with projected revenue and Medicaid surplus

According to Thursday's revenue forecast, over the next two years, Indiana is expected to collect close to $2.5 billion more than was predicted in April.

Credit: WTHR

Members of the Senate Budget Committee meet at the Indiana Statehouse, Thursday, Dec. 18, 2025.

NDIANAPOLIS — The numbers are in from the state's latest revenue forecast, and it looks Indiana is expected to bring in more money over the next two years than was originally expected.

According to Thursday's revenue forecast, over the next two years, Indiana is expected to collect close to $2.5 billion more than was predicted in April.

That's not the only surplus projected. 

Lawmakers on the State Budget Committee also got an update on how much Indiana is expected to spend on its Medicaid programs over the next two years. Compared to what was first predicted in April, Indiana is now expected to spend close to $470 million less on Medicaid over the next two years.

The state says the savings come from a drop in enrollment numbers in Medicaid programs like the Healthy Indiana Plan for low-income adults and Hoosier Healthwise for children and families.

So, what will happen with the money that's forecasted to be saved?  

Democrats and Republicans on the State Budget Committee have different takes on that.

"I already filed legislation to restore funding to On My Way Pre-K, to CCDF child care fund, and also, we are proposing to eliminate utility taxes, so we have many opportunities to still maintain healthy reserves but restore funding to critical programs that were cut in the 2025 budget," said State Sen. Fady Qaddoura (D-District 30), who sits on the State Budget Committee.

"The amount of spending that we have in Medicaid, that's really a small amount. So, it's really not enough to start new programs. It's almost like breaking even at this point to have a $460 million surplus there. I would say we need to take our time," said State Sen. Ryan Mishler (R-District 9).

Republicans voiced cautious optimism about the predicted Medicaid surplus.

Mishler said lawmakers still need to find ways to slow down the growth in Medicaid so that the state can fund other priorities and said to expect some proposed bills dealing with reducing Medicaid spending this legislative session. 

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https://www.wthr.com/article/news/local/indiana-lawmakers-differ-projected-revenue-medicaid-surplus/531-dd8d8ff4-d78d-488f-98dc-d0fd8e30e83a