Senior Policy Analyst
The Department of Health and Human Services (HHS) today allowed Indiana to join Kentucky in imposing a work requirement on Medicaid beneficiaries as part of a three-year extension of the state’s Medicaid expansion waiver (Healthy Indiana Plan 2.0, or HIP 2.0). HHS extended HIP 2.0 even though Indiana’s own evaluation shows that it’s made it harder for eligible Hoosiers to get coverage and care. Adding a work requirement will exacerbate HIP 2.0’s shortcomings and cause additional beneficiaries to lose coverage.
HHS recently told state Medicaid directors that it’s “committed to ensuring state accountability for the health and well-being of Medicaid enrollees,” and that evaluations “must be designed to determine whether the demonstration is meeting its objectives.” Yet HHS let Indiana extend HIP 2.0, despite evidence that it hasn’t achieved its goals.
HIP 2.0 is a demonstration project under section 1115 of the Social Security Act. To gain HHS approval for it in 2015, Indiana had to explain how the state expected it to improve the delivery of health care to low-income people compared to adopting the Affordable Care Act’s (ACA) Medicaid expansion without a waiver. Indiana said it was testing whether premiums “will result in more efficient use of health care services” and how premiums “will affect enrollment, utilization, and the use of preventive and other services.”
HIP 2.0 includes two types of coverage: HIP Plus and HIP Basic. People above the poverty line are enrolled in Plus and must pay a monthly premium or lose coverage. If people below the poverty line don’t pay their premiums, they’re moved from Plus to Basic, which offers fewer benefits and requires co-payments for most forms of care.
Evaluations have found that HIP 2.0 has not met its goals because its premium structure confuses beneficiaries and has likely prompted fewer people to enroll in and maintain coverage than if Indiana expanded Medicaid without a waiver:
A Medicaid waiver shouldn’t leave beneficiaries worse off than if they received Medicaid coverage without one. In its extension application, Indiana claimed that HIP 2.0 has been effective because Plus enrollees are likelier to access primary care and adhere to a prescription drug regimen than Basic enrollees. While this data may show that Plus coverage is better than Basic, it does not show that either is superior to the Medicaid expansion coverage the state could have provided without a waiver. Studies from Ohio and other states that expanded Medicaid without a waiver show a marked increase in access to primary care services, refuting the idea that Indiana’s approach to Medicaid expansion is increasing access to care.
Enrollees who are in Basic because they didn’t pay premiums — which includes half of all African American enrollees in HIP 2.0 — are less likely to get the care they need than enrollees in Plus. These enrollees (who must pay co-pays to get most care) are less likely to get primary and preventive care, less likely to adhere to prescription drug regimens for chronic conditions such as asthma and heart disease, and likelier to use the emergency room (including for non-emergency care), the Lewin evaluation showed. State quarterly reports also consistently show that Basic members are likelier to use the emergency room.
Waiver renewal is an opportunity to assess a waiver’s effectiveness, make needed changes, or abandon the waiver altogether if it hasn’t met the objectives. Extending HIP 2.0 despite the evidence that it makes it harder for low-income people to enroll in coverage and get needed care suggests that the Trump Administration is not serious about using evaluations to guide decision-making.