Indiana Targets High Hospital Prices with New Health Care Reform Law

In a bold move aimed at tackling Indiana’s soaring health care costs, Governor Mike Braun, earlier this week, ceremonially signed House Enrolled Act 1004 into law last week. The legislation, spearheaded by State Senator Chris Garten (Charlestown), delivers sweeping reforms to increase transparency, accountability, and affordability across Indiana’s health care system.

At the heart of the legislation is a new requirement that the state’s largest nonprofit hospital systems—those with more than $2 billion in annual patient revenue—must lower their prices to align with the state average by June 30, 2029. If they fail to do so, they will lose their tax-exempt status and begin contributing state and local taxes to their communities.

“Being exempt from paying state and local taxes is a privilege,” said Sen. Garten. “Our state must hold these multi-billion-dollar nonprofit health care providers accountable in order to help bring prices down. Hoosiers are paying some of the highest health care costs in the country, and these hospital systems are a major factor behind that.”

The legislation marks a significant shift in how Indiana handles nonprofit hospitals—especially as national studies have repeatedly placed Indiana among the highest in the nation for health care expenses. Garten’s measure underscores a broader effort to ensure that powerful institutions don’t profit under the guise of community service without delivering affordable care.

HEA 1004 also takes aim at the lack of transparency in the broader health care marketplace. These same large hospital systems will now be required to offer direct-to-employer coverage arrangements and submit audited financial statements for the past two years to the Indiana Department of Health on an annual basis.

But the reforms don’t stop there.

In an effort to root out hidden costs and backdoor deals, HEA 1004 includes a series of provisions focused on insurers, third-party administrators (TPAs), and pharmacy benefit managers (PBMs):

• Insurers and TPAs must now disclose all commissions and fees to policyholders.
• PBMs are required to provide detailed breakdowns of the revenue they generate from prescription drug rebates.
• Clients of PBMs, TPAs, and insurers will now have enhanced rights to audit those entities for compliance with health plan contracts.

Sen. Garten emphasized that the bill addresses more than just hospital prices—it’s a comprehensive reform targeting the full range of hidden forces driving up costs.

“For too long, Hoosiers have been kept in the dark about how their health care dollars are spent,” Garten said. “This legislation sheds light on the entire system—providers, insurers, middlemen—and gives individuals and employers the tools to demand accountability.”

Garten has long made health care affordability a top priority. He chaired the Health Care Cost Oversight Task Force, authored legislation to promote competition in Indiana’s health care sector, and successfully pushed for new fiduciary obligations within the health insurance industry to ensure they prioritize the interests of the health plan sponsors they serve.

Wednesday’s ceremonial signing by Governor Braun marks a legislative win for Garten and a hopeful step forward for Indiana families, small businesses, and employers struggling under the burden of skyrocketing premiums and opaque billing practices.

With HEA 1004 now law, Indiana positions itself as a national leader in health care reform—sending a clear message to powerful nonprofit hospital systems and industry middlemen alike: transparency, accountability, and affordability are no longer optional.