Indiana Governor Signs Law Targeting Non-Profit Hospitals’ High Prices

FORT WAYNE, Indiana — Governor Mike Braun has signed landmark legislation that could strip charity hospitals of their non-profit status if they continue to charge high prices. This law, the first of its kind in the United States, comes after public outcry in response to a Guardian investigation.

The investigation, published in October, revealed how Parkview Health, a major non-profit hospital system in Indiana, acquired its competitors and subsequently raised prices significantly. This has left many patients and local businesses struggling to cover their medical expenses.

As the Republican gubernatorial candidate at the time, Braun, along with his Democratic opponent, criticized Parkview Health for its high charges. Lawmakers expressed their concern over the system, which reportedly has some of the highest prices in the nation despite operating in Fort Wayne, known as the most affordable metro area in the U.S.

Braun signed the legislation into law on Tuesday, responding to growing national concerns about healthcare costs and medical debt. Martin Carbaugh, a Republican representative and the bill’s author, explained that the office of management and budget will first assess prices throughout the state and create a benchmark for non-profit hospitals.

Non-profit hospitals will have until 2029 to lower their prices to meet this benchmark. Carbaugh expressed hope that many hospitals will begin to negotiate with insurers and reduce their prices before the deadline. “We’ll start to see the downward pressure put on them right away,” he said. “The hospitals know they can’t just go for broke and raise costs, only to have to lower it again in 2029.”

According to data from an Indiana advocacy group, the new legislation could potentially lead to price reductions of up to 40% at Parkview Health and similar reductions at other large hospital systems in the state. Small business owner Doug Allen, who has faced difficulties managing Parkview’s healthcare costs for his employees, stated, “It’s gonna be beneficial to everybody. Maybe people won’t be hurting so bad. Almost everybody around here is on a payment plan with Parkview. Everybody owes money to Parkview.”

Parkview Health did not respond to requests for comment but has previously stated its commitment to reducing healthcare costs. Meanwhile, the Indiana Hospital Association expressed concern over the potential loss of non-profit status based on an unknown statewide price average, citing economic factors that could threaten the financial stability of healthcare in Indiana.

Carbaugh acknowledged the struggle with high healthcare prices nationwide and commented that Indiana’s legislation might serve as a model for other states. “It’s great to be a leader,” he said. “I’m happy to be part of leading that charge.”