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Indiana and the ACA’s Medicaid expansion

Enrollment up 34%; Enrollees prefer HIP Plus, but nearly half struggle with affordability

indiana Medicaid guide

In January 2015 — a year after many other states had expanded Medicaid — Indiana won approval from CMS for its HIP 2.0 plan, which expands Medicaid eligibility to non-elderly, non-disabled adults. The state began accepting applications for HIP 2.0 in late January with coverage beginning as soon as Feb. 1, 2015.

Indiana joined six other states that had already expanded Medicaid with a waiver. 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 is considered even more complicated than the other states that had obtained waivers.

Enrollment numbers

1,498,978 people were enrolled in Indiana Medicaid and CHIP as of December 2016. That was 34 percent higher than the enrollment total in 2013.

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.

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.

Battles with CMS

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 has 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, CMS denied the request.

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 leading, 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 perfer 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.

Eligibility guidelines for Indiana Medicaid

Indiana’s Medicaid eligibility guidelines are average for children and pregnant women. Low-income adults can obtain 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)

See the Indiana Medicaid Eligibility Guide for more information on who qualifies for Medicaid.

How you can enroll in Medicaid

If you believe you or a family member may qualify for Medicaid, you have several options for submitting an application:

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 will pay 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 will drop to 90 percent by 2020.

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 money involved in expanding 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 its seven-year-old Healthy Indiana Plan, a health insurance program for uninsured adults with income at or below the federal poverty level. Participants help 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. 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

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.

Total Medicaid enrollment in the fall of 2013 in Indiana stood at 1,120,674 people.  As of December 2016, total Medicaid enrollment in Indiana had grown to 1,498,978. That’s a 34 percent increase over the total who were enrolled in the fall of 2013. Medicaid enrollment did grow by about 69,000 from the fall of 2013 to August 2014 – despite the fact that coverage had not yet been expanded – in part due to the woodwork effect.  But from August 2014 to December of 2016, total enrollment grew by nearly 309,000 people, primarily due to the fact that coverage has been expanded under Indiana’s Section 1115 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 2015, after Medicaid had been expanded, the uninsured rate fell to 9.6  Medicaid expansion – despite its complexities in Indiana – is playing a significant role in driving down the uninsured rate.

Indiana Medicaid

How to apply

Apply online at the Indiana Family and Social Services Administration or Print an application or request one by mail. Call 1-800-403-0864 to apply by phone. You may also apply in person at a Division of Family Resources office.

Who is eligible

Children up to 1 year with household income up to 208% of FPL. Children ages 1-18 with household income up to 158% of FPL. Pregnant women with household income up to 208% of FPL. Adults with incomes up to 138% of FPL can enroll in HIP 2.0.

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