Indiana’s Own Medicaid Waiver Evaluation Shows Evidence of Coverage Losses

Indiana’s Healthy Indiana Plan (HIP) demonstration, which has been approved in its current form since January 2015, has its extension application up for federal comment. If approved as is, the demonstration would be allowed to continue ten for years! The current HIP demonstration includes work requirements, a tiered benefit structure based on payment of monthly premiums (HIP Basic and HIP Plus), copayments, and multiple provisions that result in beneficiary disenrollment and reduced access to care; the state is requesting a continuation of all of these policies. Inside its application, the state has included an interim evaluation of the demonstration, which provides data showing thousands of Indianans lost coverage and many more lost benefits due to failure to meet the premium requirements imposed on them by HIP.

Indiana’s demonstration population includes a number of eligibility groups (i.e. expansion adults, parents, Transitional Medicaid Assistance beneficiaries, and certain pregnant women) with some of these groups subject to various harmful policies. There are two levels of benefits: HIP Basic and HIP Plus, enrollment in which is determined by income, eligibility group, and payment of premiums. Individuals who pay monthly premiums are enrolled in HIP Plus, which does not require copayments for services and includes vision and dental benefits.

Individuals with HIP coverage can be disenrolled for failure to comply with a number of provisions, but the failure to pay premiums is the only provision currently enforced. The premium requirement applies to beneficiaries with incomes above 100% FPL. In 2018, almost 6,000 individuals were disenrolled from coverage for failure to pay initial premiums into HIP Plus, including individuals on HIP Basic whose incomes increased above 100% FPL (pg. 150). An additional 5,500 individuals with HIP Plus benefits were disenrolled and locked out of coverage for six months (they are barred from Medicaid coverage for this length of time). This means that a total of more than 11,000 beneficiaries lost coverage due to nonpayment of premiums. (pg. 150).

Individuals with incomes at or below 100% of the poverty level who fail to pay an initial premium or monthly premiums for HIP Plus are not disenrolled but receive the lower tier HIP Basic benefit package, which does not include vision or dental services. In addition, HIP Basic enrollees are subject to copayments for services ranging from $4 for preferred prescription drugs to $75 for hospital stays. Over 140,000 beneficiaries in 2018 received fewer benefits and were subject to copayments by being enrolled exclusively in HIP Basic coverage (25 percent of total HIP population; pg. 41). Presumably these individuals were enrolled in HIP Basic due to nonpayment of premiums. An additional 25,000 beneficiaries who were originally enrolled in HIP Plus were moved to Basic coverage for failure to pay monthly premiums, resulting in a loss of benefits and higher out-of-pocket costs (pg. 150).

Copayments have been shown to reduce utilization of necessary services among low-income populations. Indiana’s demonstration is putting the thousands of beneficiaries with HIP Basic at risk of being unable to access needed care due to their limited benefit package and the increased financial burden caused by the imposition of copayments.

Under the current demonstration, individuals with incomes above 100% FPL are required to pay an initial premium within 60 days of signing up in order to be enrolled in coverage, referred to as “conditionally eligible.” Unlike its previous evaluation from 2017, the state’s evaluation data on disenrollment does not include the number of people who are “never enrolled” or fail to be enrolled in coverage due to failure to meet the initial premium requirement. The evaluation notes that individuals conditionally enrolled in HIP are not included in the data used for determining disenrollment figures (pg. 137) and, therefore, we do not know how many Indianans never received coverage or were delayed in enrolling in coverage due to nonpayment of the initial premium in recent years.

According to the previous evaluation from the state, 46,000 individuals failed to enrolled in coverage between February 2015 and November 2016 due to failure to meet the initial premium requirement. To be clear, these individuals would have received coverage through Medicaid expansion if not for the barriers created by Indiana’s demonstration. Based on the state’s previous “never enrolled” data, nearly 60,000 Indianans lost Medicaid coverage due to the HIP demonstration over those 22 months.

Despite clear evidence that people are losing coverage or benefits, Indiana is asking to continue its demonstration basically unchanged. And not just for a few more years, but for a decade. It’s hard to see what the state is demonstrating other than its ability to create barriers to coverage. One thing is clear: HIP does not promote the objectives of the Medicaid program. The federal comment period is open until March 21, 2020.