Indiana Leads the Nation with Groundbreaking Hospital Pricing Law
Indiana has stepped into the national spotlight with a bold move to reshape hospital pricing. This landmark law demands that large non-profit hospitals reduce their prices to meet or fall below the statewide average, or risk losing their nonprofit status. Signed by Governor Mike Braun in May 2025, the new legislation addresses concerns about rising healthcare costs and aims to make medical care more affordable for Hoosiers.
Background: Why Indiana Needed Change
Healthcare costs in Indiana have been a topic of debate for years. Many residents and employers noticed that some non-profit hospitals charged some of the highest prices, even though Indiana is among the more affordable states for other living expenses. The problem intensified as a few hospital systems consolidated, reducing competition and driving up costs. Public outcry, fueled in part by investigative reporting, pushed the issue to the forefront of state politics.
Key Details of the New Law
The new law impacts Indiana's largest non-profit hospitals. These facilities are now required to lower their aggregate prices — including both inpatient and outpatient services — to match the state's average by June 30, 2029. Hospitals that fail to comply will lose their nonprofit status and the associated tax benefits.
Governor Braun’s decision followed months of legislative debate and was covered thoroughly by national and local media. According to The Guardian’s detailed report, the law could result in price reductions as significant as 40% for some hospital chains, including Parkview Health and IU Health. This is expected to provide relief to both patients and local businesses struggling with medical debt.
Which Indiana Hospitals Are Affected?
Hospitals subject to the law include:
- Ascension St. Vincent (targeted for a 40.5% reduction)
- Community Health Network (34%)
- Deaconess Health System (23%)
- Franciscan Health (30%)
- IU Health (40.6%)
- Parkview Health (40.8%)
Further details from 21Alive News outline how hospitals must adjust prices in the coming years. The state’s office of management and budget will conduct a price analysis to set the benchmark. Hospitals are encouraged to negotiate with insurers and implement lower prices before the 2029 deadline.
Expected Impact on Indiana Residents
For Indiana residents, the effects of the law could be transformative. Many families and small businesses have struggled to pay hospital bills, often being forced onto long-term payment plans. Advocates believe the legislation could serve as a model for other states, as it is the first law of its kind in the U.S. to link nonprofit status to price controls in healthcare.
Community leaders and patients are hopeful this move will ease financial pressures and make care more accessible. Hospital associations, however, have raised concerns about maintaining access to quality care while managing economic pressures like inflation and tariffs.
What’s Next for Healthcare in Indiana?
Lawmakers, hospital executives, and advocacy groups will be closely watching how the healthcare landscape shifts over the next few years. The success of Indiana’s approach could inspire similar action in other states facing high hospital costs. As the deadline approaches, Hoosiers are keen to see whether price reductions actually take hold, and if this innovative law can deliver long-term relief.
By taking decisive legislative action, Indiana is at the forefront of the national conversation on healthcare affordability. Residents, policy makers, and industry watchers will all be watching closely to see if this model can help drive down costs and improve access statewide. For more details, explore comprehensive reporting from both The Guardian and 21Alive News.