Complicated Rules Are Hindering Access To Indiana’s Medicaid Program, Experts Say

May 4, 2017

Indiana has submitted new information to the Centers for Medicare and Medicaid Services on its Medicaid expansion program, the Healthy Indiana Plan, or HIP 2.0. 

The report comes as the state is waiting for permission from CMS to extend the waiver permitting HIP 2.0’s unique design for another three years. Data in the new report has some health policy experts concerned. 

In 2015, Indiana took advantage of measures in the Affordable Care Act to expand Medicaid eligibility to more of Indiana’s low-income population. Under the expansion, some 270,000 Hoosiers gained health insurance. But Indiana put a special twist on the program: In order to receive coverage, HIP 2.0 members are asked to make monthly payments into an account known as a POWER account. The new report studies how well this payment model is working.

HIP members making below the federal poverty level – about $12,000 a year for individuals – will receive a lower level of coverage, HIP Basic, if they miss a payment, or fail to make their first payment. For people above the poverty line, a missed payment means no insurance, and in some cases, being locked out from coverage for six months.

The new report finds that nearly 57,189 people missed a payment and either lost coverage or never fully enrolled because of it, between February 2015 and November 2016. That’s close to three out of 10 eligible Hoosiers earning above the poverty line who either tried to enroll or did enroll.

These numbers are concerning, says Susan Jo Thomas, director of Covering Kids and Families of Indiana, a nonprofit that works statewide to help enroll people in HIP. “If 29 percent of the people can’t get or stay enrolled, it has real consequences for their lives,” she says.

What’s more, because of Indiana’s rules, nearly 10,000 people were subject to the 6-month lockout. David Machledt, a policy analyst with the National Health Law program who studies state Medicaid programs, says it’s punitive to require payments and enforce lockouts. “These policies keep people from participating in the program and having access to medical care when they need it,” he says.

Doubts over the program’s unique facets have persisted since HIP 2.0 was implemented. Studies predating HIP 2.0 showed that requiring people to pay premiums reduces enrollment, and experts say the new information just adds to their concerns.

“This is an experiment that seems to be creating barriers to a significant share of the population” says Judy Solomon, vice president of health policy at the Center for Budget and Policy Priorities.

The report also surveyed HIP customers about their reasons for missing payments. Affordability and confusion about the payment process were the top reasons for missing payments. Some people mentioned these issues in public comments to CMS in February and March. “It’s very complicated, and there are lots of indications that people don’t understand,” says Solomon.

The Family and Social Services Administration, which administers Indiana’s Medicaid program, declined to be interviewed for this story. In a written statement, the state points to the number of people who have gained insurance through HIP. “Under HIP, no qualifying individuals under 100 percent of the federal poverty line are disenrolled,” a spokesperson wrote. “HIP 2.0 – including the POWER account requirement – is designed to incentivize members to take personal responsibility for their health and ultimately transition to employer sponsored coverage.”

According to the survey results, between 12 and 20 percent of people who lost coverage for missing a payment said they found health insurance through another source.

Solomon says Indiana’s Medicaid expansion is better than nothing. But she argues that comparing Indiana to states that did not expand Medicaid  is a false choice. Many states, such as Ohio, expanded Medicaid without requiring members to pay premiums. “Is it better than what Ohio is doing?” she asks. “The answer is no. It’s definitely not better. It’s worse.”

The architect of Indiana’s plan, Seema Verma, is now head of CMS, and national policy makers have touted the success of Indiana’s program. But Machledt hopes other states won’t follow Indiana’s lead.

“Holding up Indiana’s program as a model is not good for health policy,” Machledt says.