History of Medicaid expansion in Indiana
- Indiana phased in a Medicaid work requirement through most of 2019 before suspending it in November
- But a lawsuit has been filed to block the state’s Medicaid work requirement
- Indiana suspended the program until the case is resolved, and the COVID-19 pandemic further limited the state’s ability to impose a work requirement
- Enrollment in Indiana’s expanded Medicaid has grown significantly amid COVID-19 pandemic
Has Indiana implemented Medicaid expansion?
In January 2015 – a year after many other states had expanded Medicaid – Indiana won approval from CMS for its amended Healthy Indiana Plan (known as HIP 2.0), which expanded Medicaid eligibility in Indiana to non-elderly, non-disabled adults, but with state-specific variations from the expansion outlined by the ACA. Indiana began accepting applications for Medicaid under HIP 2.0 in late January 2015, with coverage beginning as soon as Feb. 1, 2015.
Although the majority of the states have expanded Medicaid under the ACA, several of them have used 1115 waivers to modify the terms of their expansion. The nature of a Section 1115 waiver means that Medicaid expansion is a bit more complicated in those states, and involves more conditions and requirements than the straight Medicaid expansion called for in the Affordable Care Act (ACA). But Indiana’s waiver was considered even more complicated than those of other states that had obtained previous waivers.
Does Indiana have a Medicaid work requirement?
In 2019, Indiana began phasing in a work requirement for Medicaid expansion enrollees, and people who weren’t exempt or in compliance were slated to begin losing Medicaid coverage after the end of 2019. But a lawsuit was filed to block the work requirement, and Indiana ultimately paused implementation of the work requirement altogether in November 2019, pending the outcome of the lawsuit. Medicaid work requirements in several other states have been overturned by court rulings, and the COVID-19 pandemic casts doubt on states’ ability to implement work requirements anytime in the near future. As of mid-2020, there are no Medicaid work requirements in effect anywhere in the country.
Indiana phased in a Medicaid expansion work requirement through most of 2019 before suspending it in November 2019
of Federal Poverty Level
But in July 2017, the state submitted an amendment to the waiver proposal, based on the idea that the Trump administration had signaled “a new era for federal and state partnership to meet the needs of states’ unique populations.” The waiver amendment proposed a work requirement for Indiana’s Medicaid expansion population, as opposed to the voluntary job training and employment services program that Indiana already had in place.
CMS noted in their approval of the new work requirement that the voluntary “Gateway to Work” program in the state’s original waiver did not appear to be effective. The agency stated that 244,000 HIP beneficiaries are unemployed, and 58,000 work fewer than 20 hours per week, yet only 580 HIP enrollees attended Gateway to Work orientations during the first 15 months that the program was in effect (the new work requirement is still called Gateway to Work, but it’s now mandatory instead of voluntary).
On February 1, 2018, CMS approved Indiana’s amended waiver, which is valid through the end of 2020. The state’s updated waiver includes several changes, but the community engagement (aka, work requirement) is the most significant. Although the waiver amendment was approved in early 2018, Indiana scheduled it to take effect in 2019, and included a six-month window at the start of the year when enrollees weren’t required to be working. The goal instead was to get enrollees used to the new system, the work/community engagement requirements, and how the reporting process would work.
In the second half of 2019, the work requirement was being gradually phased in: As originally scheduled, from July through September, enrollees had to work at least 20 hours per month. From October through December, they had to work at least 40 hours per month. In the first half of 2020, they would have had work at least 60 hours per month. And from July 2020 onwards, they would have had to work at least 80 hours per month.
Lawsuit filed to block Indiana’s Medicaid work requirement
In September 2019, a lawsuit was filed by the National Health Law Program and Indiana Legal Services, Inc., on behalf of four plaintiffs who are enrolled in expanded Medicaid in Indiana. The lawsuit contends that CMS overstepped its bounds in approving the state’s work requirement, and that the approval constitutes “unauthorized attempts to re-write the Medicaid Act.”
The lawsuit notes that an actuarial analysis indicated that 24,000 people are expected to lose coverage each year in Indiana due to failure to comply with the work requirement—and that does not count people who will be working or otherwise complying with the community engagement requirement but fail to comply with the reporting requirements.
At the time the lawsuit was filed, the state’s Medicaid work requirement was set at 20 hours per month: Enrollees subject to the work requirement had to either be exempt or reporting at least 20 hours per month of community engagement. The state had been tracking compliance in 2019 to determine whether people would continue to have coverage as of January 2020.
It’s noteworthy that when Indiana suspended its work requirement, Medicaid work requirements in Arkansas, Kentucky, and New Hampshire had already been blocked by a federal judge over concerns that the states have not adequately addressed the issue of coverage losses stemming from Medicaid work requirements.
Work requirement suspended in November 2019, pending federal lawsuit
Non-compliant Medicaid enrollees in Indiana were slated to lose coverage starting in January 2020, but in light of the lawsuit (and similar work requirements being overturned by court rulings in other states) Indiana announced in November 2019 that “the state is not currently enforcing benefit suspensions and will not until after a federal lawsuit is resolved.” The state had been maintaining a web page about the work requirement (which is no longer active). In late 2019, the page had stated that if and when the suspension was lifted and the work requirement reinstated, members would receive “substantial advance notice” regarding the requirements and the timeline for compliance.
But the COVID-19 pandemic that began in early 2020 further reduced the chances of Indiana restarting the work requirement in the near future. The federal government has increased funding for Medicaid, but one of the requirements for states to receive this additional funding is that states cannot terminate enrollees’ Medicaid eligibility during the COVID-19 emergency period. A work requirement — with termination for non-compliance — would go against this requirement, which is part of the reason there are no active Medicaid work requirements anywhere in the country as of mid-2020 (Utah had an in-force Medicaid work requirement that was suspended in April 2020 as a result of the COVID-19 pandemic; no other states had currently active Medicaid work requirements at that point).
The details of Indiana’s work requirement – if and when it’s eventually enforced
Although Indiana’s Medicaid work requirement is no longer active, here are the details of how it would have worked:
Before it was suspended, the new work requirement applied to HIP enrollees ages 19 to 59, but there were several categories of exempt populations, including students, pregnant women, a primary caregiver for a child under the age of seven or a disabled dependent, medically frail individuals, people actively undergoing substance abuse treatment, those who are homeless or were recently incarcerated, and several other categories, described on pages 12/13 of the waiver approval (Indiana is seeking federal approval to add an exemption for Native Americans and for caretakers of children under the age of 13).
Non-exempt Medicaid enrollees in Indian have to either work, attend job training or other schooling/educational program, perform community service, volunteer or meet the requirement in one of the other available manners (see page 13/14). The state has created an online assessment that Indiana Medicaid enrollees can use to determine their Gateway to Work status and learn what tools and programs might be available to help them secure employment.
Indiana plans to verify compliance with the community engagement program once per year, in December. At that point, each non-exempt Medicaid enrollee will need to have complied with the community engagement requirements for at least eight months during the year (unless the person wasn’t enrolled for the full year, or was exempt for part of the year; those enrollees will be allowed to have missed the community engagement requirements for up to four months during the time they were enrolled). A person who fails to comply will be disenrolled from Indiana Medicaid as of January 1, but can re-enroll if he or she completes a month of community engagement and submits documentation to the state.
Additional changes in Indiana’s updated Medicaid waiver include:
- Medicaid enrollees who use tobacco and don’t participate in any of the available tobacco cessation programs will be assessed a premium surcharge after their first year in the HIP program.
- Instead of charging HIP Plus enrollees a premium equal to exactly 2 percent of their income, the program will transition to using income bands, structured so that most enrollees pay no more than 2 percent of their income. This change is expected to minimize the administrative burden for the program.
- Medicaid enrollees in Indiana who fail to provide requested documentation for the annual eligibility redetermination process will be disenrolled from HIP. At that point, they’ll have 90 days to submit the necessary documentation, but if they still fail to do so, they can be disenrolled from HIP for up to another three months (so six months total). The Obama Administration CMS had denied the state’s request for this lock-out period, but the Trump Administration is allowing it. So people who are disenrolled for failure to provide necessary documentation for eligibility redetermination will no longer be allowed to reapply anytime they like, as was previously the case. Although the work requirement in Indiana’s updated 1115 waiver has garnered more attention, the eligibility lock-out period for people who fail to provide requested documentation could result in tens of thousands of people in Indiana being forced to go without Medicaid coverage.
In the case of people who transition from Medicaid to commercial insurance, Indiana has subsequently submitted a proposal that calls for the state to provide these enrollees with $1,000 that can be used for premiums and out-of-pocket costs for commercial insurance in the 12 months after the person transitions off of Medicaid.
How many Indiana residents are enrolled in Medicaid?
As of late 2013, just prior to the ACA Medicaid expansion, 1,120,674 people were enrolled in Medicaid and CHIP in Indiana. By March 2020, that figure stood at 1,500,984 — a net enrollment growth of 34 percent. And amid the COVID-19 pandemic, enrollment grew even more, with 1,563,101 covered by Indiana Medicaid/CHIP as of May 2020.
When Indiana expanded Medicaid with HIP 2.0, it was estimated that 559,000 people would be eligible for coverage under expansion, although not all of them would enroll. The state had projected that 427,702 people would be enrolled by January 2017. In reality, enrollment has been tracking a little lower than projected; in January 2017, there were 403,142 people enrolled. (Indiana’s waiver amendment, submitted in mid-2017, notes that “over 400,000 individuals are fully enrolled in HIP.”) By August 2019, that number had increased to 416,933.
In most states that have expanded Medicaid, enrollment has been higher than projected. But the premium requirement in Indiana’s Medicaid expansion (for HIP Plus, described below) has meant that roughly 30,000 people in any given month have been determined eligible within the previous 60 days, but have not paid their initial premium to effectuate coverage.
But enrollment skyrocketed amid the COVID-19 pandemic (not surprisingly, given how many adults lost their health coverage when they lost their jobs and income), with 508,884 people covered under the Healthy Indiana Plan as of May 2020.
Battles with CMS over Indiana Medicaid lock-outs
HIP 2.0 includes a six-month re-enrollment lock-out for people above the poverty level who fail to pay required premiums. But ever since the original HIP waiver approval in 2007, Indiana had also had a 12-month lock-out for people who fail to complete the eligibility redetermination process.
There was some confusion in terms of this aspect of the program, as Indiana officials assumed it had been approved by CMS, while CMS indicates that they would not have approved such a provision. In April 2016, Indiana asked CMS to make the lock-out (now set at six months, and effectively only three months since there’s an initial 90-day reinstatement period) officially part of HIP 2.0, but in August 2016, CMS denied the request. However, the February 2018 waiver approval from CMS (now under the Trump Administration instead of the Obama Administration) allows Indiana to implement the eligibility lock-out period for Medicaid expansion enrollees who fail to complete their eligibility redeterminations, as long as the state ensures that there are exceptions for certain vulnerable populations and for mitigating circumstances.
In June 2016, Indiana officials expressed concerns about an access to care survey that CMS (under the Obama Administration) was conducting regarding HIP 2.0. The state claimed that the survey was biased and misleading, and also that it was unnecessary, as the state has already had an independent party evaluate beneficiaries access to care under HIP 2.0. CMS had not said directly that they had concerns about access to care under HIP 2.0, but had noted that they were trying to gain a clear understanding of how Indiana’s unique implementation of Medicaid expansion was impacting access to care, since some other states were considering similar proposals.
The interim report on the access to care survey indicated that while 52 percent of HIP Plus enrollees did not struggle to pay their premiums, 16 percent always worried about the affordability of HIP Plus premiums, while 29 percent worried about affordability usually or sometimes. Enrollees prefer HIP Plus (as opposed to HIP Basic), but the inclusion of premiums adds an element of economic uncertainty that doesn’t exist in states where Medicaid was expanded without deviation from the ACA’s original plan.
Who is eligible for Medicaid in Indiana?
Indiana’s Medicaid eligibility guidelines are average for children and pregnant women. Low-income adults can obtain Medicaid coverage under the Healthy Indiana Plan (the state’s version of Medicaid expansion), described below.
Indiana’s Medicaid eligibility standards as of February 1, 2015 are:
- 208 percent of the federal poverty level (FPL) for children up to 1 year old
- 158 percent of FPL for children 1 to 18 years old; the Children’s Health Insurance Program (CHIP) covers children at higher income levels, up to 250 percent of FPL
- 208 percent of FPL for pregnant women
- 138 percent of FPL for other adults (Healthy Indiana Plan 2.0)
How do I apply for Medicaid in Indiana?
If you believe you or a family member may qualify for Medicaid, you have several options for submitting an application:
- Apply online through the Indiana Family and Social Services Administration or at HealthCare.gov.
- Call 1-800-403-0864 to apply by phone.
- Apply in person at a Division of Family Resources office. Find a nearby office.
Indiana’s alternative to Medicaid expansion
Under the Affordable Care Act, Medicaid expansion is a vital strategy to make health care accessible to more people and to reduce the nation’s uninsured rate. Through the ACA, the federal government paid 100 percent of the cost of covering low-income adults, up to 138 percent of FPL, through the Medicaid program until 2016. The federal portion gradually dropped to 90 percent by 2020, where it will remain.
Although Indiana expressed willingness to consider a modified version of Medicaid expansion, both Governor Pence and the head of the Indiana Family and Social Services Administration took the position that Medicaid must be reformed, not just expanded. But there was significant federal money available to states that expand Medicaid. If Indiana had not expanded coverage at all, the state would have missed out on $17.3 billion in federal funding in the decade from 2013 to 2022.
Indiana did not adopt straight Medicaid expansion as structured under the ACA. However, the state did receive a federal waiver to continue (and expand upon) its then seven-year-old Healthy Indiana Plan, a health insurance program for uninsured adults with income at or below the federal poverty level, in which participants helped pay the first $1,100 of care. However, the program didn’t cover as much as Medicaid does, and there was a limit on the number of people that could be covered. As of late August 2014, the Healthy Indiana Plan was closed to new enrollment.
In January 2015, Indiana received approval for another waiver, which the state calls HIP 2.0. The plan removes Healthy Indiana’s enrollment caps, opens the program to those making less than 138 percent FPL, and requires cost-sharing (premiums and copayments) for many enrollees.
Enrollees in HIP 2.0 can pay premiums in order to receive more generous benefits, called HIP Plus. The premiums are as low as one dollar per month for people with income in the 0% to 5% of FPL range, and are in the form of contributions to a “Personal Wellness and Responsibility” (POWER) health savings account.
Those who don’t pay premiums receive lesser benefit packages. For enrollees with incomes between 101% and 138% of FPL, premiums are required in order to enroll in HIP 2.0, although they’re capped at 2 percent of income (there is some additional flexibility in terms of how these premiums are determined, under the waiver extension that CMS approved in 2018; premiums are still generally less than 2 percent of income for most beneficiaries, but they’re based on income brackets, rather than each enrollee’s exact income). For those enrollees, there’s a six-month wait to re-enroll if they’re disenrolled because of failure to pay premiums (there’s a 60 day grace period for overdue premiums – after that, the coverage terminates).
For people who enroll in HIP Plus, coverage is effective as of the first day of the month that the enrollee pays the first premium, rather than the date of the Medicaid application.
For enrollees with incomes at the poverty level or below, HIP Basic offers an alternative that doesn’t require premiums, although it also doesn’t have some of the benefits of HIP Plus (no adult dental and vision, for example), and enrollees have to pay copays for services. If HIP Plus enrollees (with income that doesn’t exceed the poverty level) fail to pay premiums, they’re transferred into the HIP Basic plan instead.
Background on Indiana’s Medicaid program
After Medicaid was founded in 1965, Indiana was one of the last states to implement a Medicaid program, waiting until Jan. 1, 1970. Legislation authorizing the state-federal partnership was enacted in July 1965. Forty-one-states and the District of Columbia moved ahead with Medicaid implementation before Indiana.
As a result of the ACA Medicaid expansion, Indiana’s Medicaid and CHIP enrollment grew significantly from 2013 through 2020, going from 1,120,674 enrollees to more than 1,563,000 enrollees as of May 2020. More than half a million Indianans are enrolled in Medicaid as a result of the expanded eligibility guidelines implemented by the ACA and the state’s HIP 2.0 waiver.
From 2013 to 2014, the uninsured rate in Indiana declined slightly from 14 percent to 11.9 percent, according to U.S. Census data. By 2016, after Medicaid had been expanded, the uninsured rate fell to 8.1 percent (it stayed at roughly the same level in subsequent years, growing slightly to 8.3 percent by 2018, which mirrored the nationwide trend of increasing uninsured rates under the Trump administration). Medicaid expansion — despite its complexities in Indiana — is playing a significant role in driving down the uninsured rate.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.