CMS Turns Down Indiana Request to Lock People Out of Health Coverage Who Don’t Complete Renewal Process

While we at CCF were wrapping up our annual conference on Friday, CMS sent a letter to Governor Pence’s office turning down a request by the state to amend their Medicaid Section 1115 HIP 2.0 waiver in two ways that would have been harmful to beneficiaries. The first issue is especially of interest as we await Kentucky’s waiver submission any day now which may ask for a similar approach to be permitted.[1]

The state of Indiana requested federal approval to allow it to refuse coverage for six months for folks who fail to complete the redetermination process in a timely way. In other words, if a beneficiary doesn’t send back the required paperwork they not only lose coverage (as they would elsewhere in the country) but they are PROHIBITED FROM REAPPLYING FOR SIX MONTHS. Approximately 19,000 persons could be affected by this lockout.

As the state pointed out in its letter requesting the change, this is not a common occurrence – the state reports that 95% of folks do return their paperwork. So why might some folks not return their paperwork?

Well as CMS points out in its response, many low-income individuals face challenges in completing the redetermination process. For example, the very lowest income Medicaid beneficiaries may be homeless or living on the brink of homelessness. I used to work with homeless people when I started my career, and one challenge they face, unsurprisingly, is getting their mail consistently. The redetermination notice may not have reached these folks.

Indiana’s own data suggest that over 50% of HIP enrollees have incomes below 50% of the poverty line. While the state’s data is probably wrong, it’s important to note that this is precisely the population that faces very high degrees of residential instability and homelessness.

Another barrier that CMS notes is the possibility of disabling conditions such as mental illness which makes the completion of tasks in the renewal process challenging. For those who are suffering from a behavioral health condition, including substance abuse, the loss of Medicaid when they need it most would be devastating.

Some background here – the state of Indiana received approval in the HIP 2.0 agreement to institute a six-month lockout for those above the poverty line who don’t pay their premiums. In fact this was one of the most controversial provisions of this waiver agreement.[2]

A lock out for any reason is bad health policy in my judgement – especially for the Medicaid program, which serves vulnerable populations. Conditions are left untreated and worsen during the period of uninsurance and become more expensive to deal with. Medical debt can pile up, making it harder and harder for the beneficiary to get back on their feet. And as described above, those likely to not complete the renewal process are probably those who are experiencing some kind of health or financial crisis already – precisely when they need their health coverage most.

On top of it all, policies like these are complicated and inevitably expensive to administer. They also undermine efforts to measure and track quality of care – because most quality measures can only be assessed if someone has continuous coverage for at least a 12-month period.

At a time when our health care system needs to move towards more effective use of our health care dollars with improved quality measurement and continuous coverage, a lockout takes us precisely in the wrong direction. So I am relieved that CMS turned this request down, especially as we know other states are watching….

[1] The second issue relates to the waiver of retroactive coverage that was granted on the condition that a program be established to pay outstanding claims for a certain percent of parents. The state wishes to discontinue this program.

[2] We and others urged CMS to turn this down in our comments on the waiver application.