INDIANAPOLIS (Legal Newsline)-Indiana Attorney General Greg Zoeller on Friday issued a lengthy report on the Senate health care bill before Congress, saying the proposal would cost the Hoosier State millions of dollars if enacted.

Zoeller, a Republican, submitted the 55-page report to members of the state's congressional delegation. U.S. Sen. Richard Lugar, R-Ind., requested the report.

"Our report to Senator Lugar and the Indiana delegation identifies the legal and constitutional challenges likely to be litigated should this health care bill be enacted into law; and it also highlights the significant impact of this proposed legislation on Indiana," Zoeller said.

In his report, Zoeller said the Senate bill would "create unintended consequences for patients, taxpayers and Indiana's medical-device industry."

The bill, drafted by Senate Majority Leader Harry Reid, D-Nev., could also raise health insurance premiums significantly.

"Factors such as mandatory health insurance for particular types of services and strict regulations of the factors insurers may use to determine health status ratings threaten to raise health insurance premiums by as much as 75 percent," the report said.

The attorney general's report said rather than reduce health care costs, the Senate version of the health care bill would instead just subsidize rising health care costs through an expansion of Medicaid and through the proposed insurance exchange where individuals could purchase plans as a large bloc.

Under the plan, Indiana's Medicaid costs would increase by $2.4 billion over 10 years. The legislation could also cost the state as much as $80 million to implement insurance changes as the Medicaid program expands.

The Senate legislation requires that the states provide Medicaid coverage to anyone making up to 133 percent of the federal poverty level -- a move that will likely expand the number of Medicaid-eligible persons throughout the country and increase the financial burden on the states since they bankroll part of the program.

If passed, Zoeller said he expects court challenges to the bill's constitutionality since the plan would exempt Nebraska from having to pay increased Medicaid costs. The provision was inserted to gain the support of Nebraska Sen. Ben Nelson, a Democrat.

"But even allowing for wide latitude in congressional deal-making, the unfairness and favoritism of the Nebraska Compromise goes too far," said Zoeller, who served as an aide to former U.S. Sen. Dan Quayle, R-Ind.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.