House Health Committee Advances Legislation to Save Millions in Medicaid Funding and Expand Access to Care for Elderly Hoosiers
January 14, 2026 | Press Release
STATEHOUSE (Jan. 13, 2026) – The Indiana House Public Health Committee unanimously voted to advance House Bill 1277 today, which would reform the PathWays for Aging Medicaid program for elderly and vulnerable Hoosiers in need of skilled nursing, assisted living and other home and community-based services.
House Bill 1277, authored by State Rep. Brad Barrett (R-Richmond), would save hundreds of millions of dollars in Medicaid funding annually, while opening the door for more individuals to come off of the current waitlist for home and community-based services via the Health & Wellness and PathWays Medicaid waivers. These waivers allow individuals who qualify for nursing home level of care to be served in their home or community, such as in an assisted living community. The waitlist was imposed in April of 2024 and continues to grow. Currently 16,579 Hoosiers are on the waitlist and await needed services.
“With a waitlist that grows every day, $300 million in cost overruns, and two of the three insurance companies selected to run the program placed on corrective action by the state, immediate action is warranted to prevent these problems from growing,” said Paul Peaper, president of the Indiana Health Care Association/Indiana Center for Assisted Living. “House Bill 1277 makes targeted policy changes to help older Hoosiers, their families and caretakers. We appreciate State Representative Barrett for his leadership on this issue and supporting Indiana’s seniors.”
The PathWays for Aging program has been plagued with issues since it launched July 1, 2024. The program allows Humana, Elevance Health, and United Health Care to oversee, on behalf of the state, the Medicaid coverage for 117,000 Hoosiers in need of nursing home and home and community-based services. Humana and Elevance were placed on corrective action plans with the state soon after the program’s launch due to a multitude of billing, claims processing and other contract violations. Accordingly, these insurance companies owed more than $100 million in late payments and inappropriately denied Medicaid payments last year to the nursing home industry alone, in addition to other service providers.
After the first year of the managed care entities overseeing the PathWays program, the program is more than $300 million over budget. Given the PathWays program’s long-documented shortcomings and failures and to save the state money, House Bill 1277 seeks to move long-stay nursing home residents out of the PathWays for Aging program and into a fee-for-service model that is not run by the insurance companies, similar to what is currently in place for those 59 years old and younger.
The bill would also clarify existing law that an individual on the PathWays for Aging waiver cannot exceed the annual costs of an individual who could be cared for in a nursing home. As has been presented in the December Medicaid forecast before the State Budget Committee, FSSA shared that some individuals are costing the Medicaid program $150,000-$200,000 or more per year for attendant care on the Medicaid waivers, while nursing home care is nearly half that and assisted living care is a fifth of that cost.
The bill goes on to require FSSA to file a request with the Centers for Medicare and Medicaid Services to establish a standalone waiver for assisted living services similar to what Illinois and Ohio have established.
The cost savings from these initiatives could be used by the state to eliminate the growing list of more than 16,500 Hoosiers who are waiting for home and community-based Medicaid waiver services.
“The waitlist was in response to exploding Medicaid costs, and assisted living is being unfairly targeted,” Peaper said. “A separate waiver creates a clear path to the most affordable HCBS service that generates the clearest savings to the state. A separate waiver also allows the state to specifically assess the population using those services and the resulting cost savings realized versus lumping assisted living in with more than a dozen other HCBS, as is currently the case for PathWays and the corresponding waitlist.” House Bill 1277 was referred to the House Ways and Means Committee for further consideration.