Litigation prompts Indiana to drop Medicaid work requirement for now

By | November 2, 2019

Dive Brief:

  • Indiana has suspended its work requirements for Medicaid enrollment, little more than a month after a lawsuit was filed challenging the rules.
  • As a result, enrollees who were in danger of losing their Medicaid coverage in January will retain their benefits.
  • However, state officials are still encouraging enrollees to submit work data so they may be connected with other programs.

Dive Insight:

Like several other red states that have permitted the expansion of Medicaid eligibility under the Affordable Care Act, Indiana has recently imposed work requirements on enrollees in what is known as the Healthy Indiana Plan. It requires Medicaid enrollees to report they are working at least 20 hours per month, or are engaged in activities such as seeking a job or job training.

However, the practice has long been criticized as a way to cut the Medicaid rolls — in part by making the reporting requirements for individual enrollees too onerous for them to maintain ongoing compliance. Indiana officials indicated the work requirements might reduce its Medicaid rolls by about 5%, or 70,000 out of a total enrollment of 1.4 million.

A recent Government Accountability Office report found the controversial requirements cost taxpayers more than $ 400 million and warned of lack of oversight.

That hasn’t kept Trump administration officials from promoting more deregulation in the federal-state program. This week at the HTLH conference in Las Vegas, CMS Administrator Seema Verma said the agency will “soon outline new opportunities for states to flip the Medicaid paradigm and free themselves from federal micromanagement.”

HHS was sued in September for allowing Indiana to obtain a work requirement waiver. Indiana’s is known as the Gateway to Work initiative.

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The lawsuit, Rose v. Azar, was filed in U.S. District Court in the District of Columbia by the National Health Law Program and Indiana Legal Services. It accuses the Trump administration of bypassing Congress to “fundamentally transform Medicaid.”

It is one of numerous pieces of litigation challenging Medicaid work requirements. Federal judges have blocked similar initiatives from being put into place in Arkansas and Kentucky. During oral arguments in October, judges with the D.C. Circuit Court of Appeals seemed highly skeptical of the requirements in those states

According to a statement issued by the Indiana Family and Social Services Administration, that agency is suspending the work requirement “to allow time for the Rose lawsuit to be resolved and so that the court can address the challenge to HIP after similar legal challenges to programs like Gateway to Work in other states have worked their way through the appeals process.”

However, the agency indicated it would still encourage Medicaid enrollees to report their activities either working or seeking jobs or training so they could be connected to other related programs at the state and local levels.

“We remain committed to operating the Gateway to Work program and to continuing to build on the early successes of the program, through which HIP members are reporting successful engagements in their workplaces, schools and communities,” Indiana Medicaid Director Allison Taylor said.

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