Medicaid expansion in Indiana
of Federal Poverty Level
31 states and the District of Columbia have expanded Medicaid under the ACA, and Indiana is among eight of those states that 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 the other states that had obtained previous waivers.
New waiver amendment allows work requirement starting in 2019
In January 2017, Indiana submitted a proposal to extend the state’s existing 1115 waiver for HIP 2.0, with some additional technical changes and “program enhancements” designed to encourage tobacco cessation, substance abuse treatment, and better management of chronic diseases.
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 the Medicaid expansion population, as opposed to the voluntary job training and employment services program already 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.]
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. The Indiana work requirement won’t take effect until 2019 (Medicaid work requirements were also approved for Arkansas and Kentucky in early 2018; the Arkansas Medicaid work requirement can be implemented as of June 2018, and the Kentucky work requirement will take effect in July 2018).
In Indiana, the work requirement will apply to HIP enrollees ages 19 to 59, but there will be 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.
Non-exempt enrollees will 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 plans to phase in the work requirement (which is different from the approach that other states are taking), and will start with a five-hour per week minimum, gradually increasing to a requirement of 20 hours per week of community engagement by the time the program has been up and running for 18 months.
Indiana plans to verify compliance with the community engagement program once per year, in December. At that point, each non-exempt 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 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 waiver include:
- 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.
- Enrollees 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 being forced to go without coverage.
1,498,978 people were enrolled in Indiana Medicaid and CHIP as of December 2016, which was 34 percent higher than the enrollment total in 2013. But by the end of 2017, total enrollment in Indiana Medicaid and CHIP stood at 1,465,662, for a net enrollment growth of 31 percent since 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. (Indiana’s waiver amendment, submitted in mid-2017, notes that “over 400,000 individuals are fully enrolled in HIP.”) By January 2018, that number had increased to 412,019.
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 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, 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 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:
- 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 is gradually dropping, and will reach 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 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 (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
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 2017, total enrollment in Indiana Medicaid and CHIP stood at 1,465,662, for a net enrollment growth of 31 percent since 2013. Of that total, roughly 412,000 were enrolled in Medicaid as a result of the expanded eligibility guidelines implemented by the ACA and the state’s HIP 2.0 waiver.
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 2016, after Medicaid had been expanded, the uninsured rate fell to 8.1 percent. 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.