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Indiana and the ACA’s Medicaid expansion

Indiana had paused implementation of its work requirement, and the Biden administration subsequently revoked approval for the work requirement

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. The Healthy Indiana Plan 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?

No, Indiana does not have a Medicaid work requirement. A work requirement was approved by the Trump administration but never implemented, and the approval was ultimately revoked by the Biden administration.

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 paused implementation of the work requirement altogether in November 2019, pending the outcome of the lawsuit.

The COVID pandemic made Medicaid work requirements essentially unworkable, and as of the spring of 2020, there were no Medicaid work requirements in effect anywhere in the country. The Families First Coronavirus Response Act, enacted in March 2020, provided additional federal Medicaid funding but prevented states from terminating coverage for any Medicaid enrollees during the COVID public health emergency period.

In June 2021, the Biden administration notified Indiana that approval for the Medicaid work requirement was being withdrawn, so it will not go into effect after the COVID pandemic ends.

Indiana phased in a Medicaid expansion work requirement through most of 2019 before suspending it in November 2019

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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 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 were unemployed, and 58,000 worked 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 was still called Gateway to Work, but it was made mandatory instead of voluntary).

On February 1, 2018, CMS approved Indiana’s amended waiver through the end of 2020. The state’s updated waiver included several changes, but the community engagement provision (aka, work requirement) was 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 to work at least 60 hours per month. And from July 2020 onwards, they would have had to work at least 80 hours per month.

Indiana has accepted federal Medicaid expansion

  • 1,439,013 – Number of Indianans covered by Medicaid/CHIP as of July 2018
  • 318,339 – Increase in the number of Indianans covered by Medicaid/CHIP fall 2013 to July 2018
  • 41% – Reduction in the uninsured rate from 2013 to 2017

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., challenging the Medicaid work requirement.

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.

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, and the associated widespread job losses, made it impossible for states to implement Medicaid work requirements. And in Jun 2021, the Biden administration officially rescinded the approval for Indiana’s Medicaid work requirement.

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 January 2021, that figure stood at 1,783,904 — a net enrollment growth of 59%. And enrollment has continued to climb in 2021, with 1,872,110 enrollees as of June 2021.

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 was tracking a little lower than projected prior to the COVID pandemic; in January 2017, there were 403,142 people enrolled. (Indiana’s waiver amendment, submitted in mid-2017, noted that “over 400,000 individuals are fully enrolled in HIP.”)

By August 2019, that number had increased to 416,933. But enrollment grew considerably during the COVID pandemic: By June 2021, there were more than 690,000 people enrolled in Medicaid expansion in Indiana.

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% of HIP Plus enrollees did not struggle to pay their premiums, 16% always worried about the affordability of HIP Plus premiums, while 29% 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 2021 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% of FPL
  • 208% of FPL for pregnant women
  • 138% of FPL for other adults under age 65 (Healthy Indiana Plan 2.0)

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

How does Medicaid provide financial help to Medicare beneficiaries in Indiana?

Many Medicare beneficiaries receive help through Medicaid with the cost of Medicare premiums, prescription drug expenses, and costs that aren’t covered by Medicare — such as long-term care.

Our guide to financial resources for Medicare enrollees in Indiana includes overviews of those programs, including Medicare Savings Programs, long-term care benefits, and income guidelines for assistance.

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:

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% of the cost of covering low-income adults, up to 138% of FPL, through the Medicaid program until 2016. The federal portion gradually dropped to 90% 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% 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 1,872,110 enrollees as of June 2021. And nearly 700,000 of those enrollees have Medicaid coverage 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% (it stayed at roughly the same level in subsequent years, growing slightly to 8.7% by 2019, 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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Apply for Medicaid in Indiana

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.

Eligibility: 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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