State aims to extend Healthy Indiana Plan

Editor’s note: This article has been updated to note that the suspended work requirement under review by the courts is part of Indiana’s proposed Healthy Indiana Plan extension.

Indiana has submitted a request for a 10-year extension of its Medicaid alternative program, the Healthy Indiana Plan, and still included is the suspended work requirement that was imposed on some enrollees in the public assistance program but is currently under review by the courts.

The Indiana Family & Social Services Administration filed a waiver application with the Centers for Medicare and Medicaid Services, requesting that the HIP plan be approved through December 2030. Although this is the first time the state is seeking a 10-year waiver, Indiana contends the extension would give staff more time to operate and improve HIP.

CMS has completed its preliminary review of the application and started a 30-day federal public comment period.

New to the waiver request are treatment options for individuals with substance use disorder and serious mental illness. Also, while the Gateway to Work component remains part of HIP, the state has dropped the mandate that eligible recipients would be required to work, eventually 80 hours per month, in order to retain the health benefits.

Indiana implemented the Medicaid work requirements in January 2019, but Indiana Legal Services and the National Health Law Program sued in the U.S. District Court for the District of Columbia, challenging the constitutionality of that and other new HIP components. Little more than a month after the complaint was filed in September 2019, FSSA announced that until the lawsuit was settled, it would not suspend any Medicaid recipient’s benefits for failure to comply with the Gateway to Work program.

In the interim, the Columbia District Court overturned a similar program in Arkansas, finding the work requirement did not fit Medicaid’s core objective of providing medical assistance to the poor. After an appeal was filed, Indiana asked the district court to stay the litigation over its program until the U.S. Court of Appeals for the District of Columbia Circuit ruled.

The Columbia Circuit upheld the lower court’s ruling Feb. 14. When the district court partially granted Indiana’s motion to stay, the parties had to explain the impact on the Hoosier program if the circuit court affirmed. In its response to the court’s order, the state argued if the appellate court affirms the rulings in the Kentucky and Arkansas cases, HIP’s approval should be remanded. Allowing the approval to stand, the state contended, will permit the program’s other longstanding components and the substance use disorder program to remain in effect while the Secretary of Health & Human Services considers whether to reapprove without the work requirement.

The plaintiffs urged the district court to vacate the approval.

“What is clear is that Defendants’ argument that remand without vacatur will ‘not harm Plaintiffs in the slightest’ is wrong,” ILS and the National Health Law Program argued. “Tens of thousands of lives will be disrupted. While Indiana has paused implementation of the work requirements and the redetermination lockout penalty, it is implementing the other components of the 2018 approval – mandatory premiums, elimination of retroactive coverage, and elimination of non-emergency medical transportation. Substantial evidence establishes that these features reduce coverage and access to care.”

The case is Monte A. Rose, Jr., et al. v. Alex M. Azar II, et al., 1:19-cv-02848.•

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