Session Overview
Indiana’s 2025 legislative session, which convened on January 8 and adjourned on April 24, saw the introduction of more than 1,200 bills. As of adjournment, Governor Mike Braun (R) had signed over one hundred measures into law, with additional legislation still under executive review. In his first State of the State address on January 29, Governor Mike Braun (R) outlined his policy agenda, which he called the “Freedom & Opportunity Agenda.” His priorities included tax relief, government efficiency, public safety, workforce development, healthcare reform, and education reform.
Healthcare and Medicaid
Healthcare reform was a key issue for the Governor and Republican leadership, with Medicaid being a significant focus. The Senate gave final approval to SB 2 on April 17, though the Governor had already signed an executive order (25-60) containing the same directives for the Family and Social Services Administration (FSSA). The measure mandates more frequent checks of Medicaid recipients’ eligibility and restricts the program for low-income adults who earn too much to qualify for traditional Medicaid under the Health Indiana Plan.
Pharmacy benefit manager (PBM) reform also gained attention, with SB 140 approved by the General Assembly. This bill repeals existing PBM network adequacy provisions and introduces new requirements aimed at enhancing protections for pharmacies and pharmacists. It prohibits PBMs and insurers from reimbursing pharmacies below their acquisition cost plus a professional dispensing fee equal to the Medicaid fee-for-service rate, restricts the use of affiliated pharmacies, and prevents retroactive claim denials unless fraud or overpayment is identified. The bill also directs the legislature to study concepts related to PBMs during the 2025 interim. This measure was signed by Governor Braun on May 6 and takes effect immediately.
Data
SB 431, signed into law on April 10, introduces restrictions on foreign-owned companies wishing to build data centers in Indiana. The law requires that such companies conduct a study on their electricity usage with the Indiana Utility Regulatory Commission (IURC) and the Indiana Economic Development Corporation (IEDC). The agencies must ensure that the data centers will self-generate electricity and not affect the state’s power grid. Supporters argue the law protects Indiana's energy infrastructure, while critics contend it may deter foreign investment and complicate efforts to attract data center projects. This measure takes effect July 1. Similar legislation is currently pending in Illinois.
Budget
On April 25, the House and Senate passed a $45 billion compromise budget, which will fund the state for the next two years. The legislature cut approximately $2 billion from the budget in the final weeks of session due to a projected drop in revenue. The budget allocates $88.9 million for fiscal year 2026 and $94.7 million for fiscal year 2027 for the Children’s Health Insurance Program, $50 million each year for Statewide Deferred Maintenance, and $101.4 million each year for the Higher Education Award Program. It also provides $300,000 annually for therapeutic psilocybin and ibogaine research. Additionally, the budget raises taxes on cigarettes and other tobacco products. The budget was signed by Governor Braun on May 6.
Looking Ahead
Attention will now turn to the implementation of newly signed laws and continued discussions on key issues. Lawmakers are expected to assess and monitor the impact of recent legislation. The interim period will also provide an opportunity for further analysis of unresolved matters, including possible adjustments to tax policies and funding allocations. Specific interim topics are still to be determined