Nearly two million people in Indiana and Kentucky are Medicaid beneficiaries.
About half of them are children and about a quarter of them are elderly or disabled. Potentially, another three quarters of a million people in Indiana and Kentucky, who are not insured now, could gain access to health care through Medicaid with the Affordable Care Act.
Under the law, the federal government would pay 100 percent of the costs of expanding Medicaid from 2014 to 2016, but in 2017, individual states would have to start picking up part of the tab.
Governors in six state plan to reject a Medicaid expansion, calling it too expensive.
The impact in Indiana could be $2.6 billion over seven years, according to Indiana's Family and Social Services Administration.
Kentucky Spirit, one of three managed care companies hired by the Commonwealth last year to help control spiraling costs in the Medicaid program, just announced it plans to end its contract next July instead of July 2014, potentially costing Kentucky millions more in their battle to get costs under control.
Lawmakers in both states must address the Medicaid issue head on in their upcoming sessions. They will need to generate added revenue to pay for it or redistribute the revenue pie differently, affecting funding for every other area.