Marion County health leaders praised Braun with $500k in ads. Then the state cut funding

Indianapolis Star

4 hours ago

The digital ads flooded the websites of IndyStar and The Indianapolis Business Journal this March and April: "Thank you, Governor Mike Braun," read an all-caps statement next to a portrait of Braun's smiling face, "for fully funding healthcare in Marion County."
The $500,000 ad campaign — paid for by the Health and Hospital Corp. of Marion County, the massive public entity that oversees Eskenazi Hospital, the Marion County Public Health Department, Indianapolis Emergency Medical Services and dozens of nursing homes — was specifically thanking the governor for including a $38 million annual state payment for uninsured and low-income patients at Eskenazi Hospital in his proposed state budget, an HHC spokesman said. The state has paid that amount to HHC annually since 2009 in recognition of Eskenazi's role as a safety net for those who can't pay.
But that praise proved premature. In April Senate Republicans released their own version of the budget that cut the $38 million in support. Weeks later, lawmakers removed an additional $17 million from the local health department while adjusting for a weaker revenue forecast. Braun signed the new two-year budget into law this May, quietly approving the cuts.
Those two losses now account for nearly half of a $125 million reduction in revenues that HHC is forecasting for 2026. To counter the funding shortfall, hospital department heads are being urged to trim their costs and HHC leaders are searching for new funding options — all while vowing to continue providing care for Marion County's most vulnerable residents.
"Every division of Health & Hospital Corporation will be expected to serve more with less," HHC spokesman Curt Brantingham told IndyStar in a written statement.
State Sen. Ryan Mishler, the Senate's chief budget writer, did not respond to a question through his spokesperson about the reasoning for the $38 million cut in state aid for patients who struggle to afford health care.
Along with that money, the HHC also lost nearly $17 million in annual state dollars through Health First Indiana, an investment in local health departments passed under Gov. Eric Holcomb that aimed to combat years of subpar public health funding. That cut came after lawmakers learned in April that they would have $2 billion less to spend because of a projected revenue decline spurred by national economic uncertainty.
The bygone state revenues and rising costs, due in large part to inflation and economic instability, have contributed to HHC's operating deficit of nearly $100 million for next year, interim CFO James Simpson said during a July 29 board meeting.
The HHC's proposed budget for 2026 is more than $2.6 billion — about $1 billion larger than the city of Indianapolis' most recent annual budget. Overall, the HHC is funded by a mix of sources: patient revenue from Eskenazi Health and nursing homes, local property and income taxes, government grants and federal programs like Medicaid.
Brantingham said the $500,000 ad campaign thanking Braun was paid for from HHC's general fund and did not require approval from the HHC Board of Trustees — the seven-member board including three members appointed by the Indianapolis mayor, two by the City-County Council and two by the county commissioners.
Asked why the ad campaign was approved before the final state budget had passed, Brantingham said HHC "was advocating for the governor's annual $38 million line item" to be included.
For 2026, HHC plans to send $25 million in property taxes to Eskenazi to replace some of the lost state funding.
Simpson said he expects the agency can reduce the $100 million deficit in the coming years by dipping into more than $800 million in cash reserves in a general fund, if needed, and maximizing the county property tax revenue it can collect. That wouldn't necessarily increase the amount of property taxes Marion County residents pay, because of property tax caps, but it will mean less money for other county taxing units like Indianapolis.
To close Eskenazi Health's nearly $60 million portion of HHC's total deficit, CEO Lisa Harris said she's asking her department leaders to find ways to reduce costs by 3.5% moving forward.
"Leaders of every division are focused on finding efficiencies and systemwide improvements that help HHC continue to serve our community and our state with care and compassion," Brantingham said in a statement.
The HHC's funding woes come as Indiana health providers expect to lose billions in federal Medicaid dollars over the next decade after the passage of the federal "One Big Beautiful Bill Act."
The reductions could cost Indiana an estimated $31 billion over the next decade, according to an analysis by the Urban Institute and Robert Wood Johnson Foundation, with the state's hospitals losing nearly $13 billion. The HHC expects to make up some of that difference through a new "State-Directed Payments" program that will supplement Indiana's low Medicaid reimbursement rate, leaders say.
Meanwhile, tens of thousands of Hoosiers are among the millions of Americans who could lose Medicaid coverage. Health experts predict a growing number of them will turn to emergency rooms for treatment that tends to be more expensive.
Harris at Eskenazi Health said she's concerned about the long-term consequences of the Medicaid cuts, which could result in longer wait times in emergency departments and more suffering from late-stage diseases that could have been treated sooner.
"When people avoid primary care, preventive care, we expect that more will end up in the emergency department," Harris said at the HHC meeting. "They will flood the emergency department, making access a challenge for everybody seeking emergency care ... And then our costs, the overall costs to the system and the community for caring for disease, will go up."