"It was important to me that we do fully fund Medicaid, but we did not fund a Medicaid expansion, nor do I think that under the current framework for Medicaid that it would be advisable for Indiana to do that," he said.
Democratic lawmakers are pushing for the state to approve the expansion, and House Ways and Means Chairman Tim Brown, R-Crawfordsville, has said he is considering paying for the expansion in the House version of the budget.
Pence's announcement came two days after Ohio Gov. John Kasich bucked a trend among Republican governors of flatly opposing the federal health care law and said he would expand Medicaid in his state.
Pence declared his intentions in a call with U.S. Department of Health and Human Services Secretary Kathleen Sebelius this week. He also told her that Indiana does not plan to build a "hybrid" health exchange with the federal government.
Even without the expansion, Indiana's Medicaid rolls are expected to grow by 90,000 as more children who already qualify for Medicaid are enrolled in the program because of the health care law's individual mandate. Milliman Inc. analysts determined this "woodwork effect" would cost the state an additional $67 million next year and another $105 million in fiscal year 2015, all of which Pence has budgeted for.
Accepting the full Medicaid expansion, for residents earning up to 133 percent of the federal poverty level could cost the state an additional $94 million next year and $151 million more in fiscal year 2015 if every qualified resident enrolled, Milliman determined. The firm estimates a full expansion would place another 682,000 residents in the program.