Trump administration approves Medicaid work requirements for Indiana, thousands to lose coverage

"By announcing today’s approval, Secretary Azar is escalating the Republican war on health care and its effort to demolish Medicaid from the inside out."

WASHINGTON, DC - JANUARY 29: (AFP-OUT) Alex Azar, new Secretary of the Department of Health and Human Services, speaks after being sworn in as President Donald J. Trump looks on January 29, 2018 at The White House in Washington, DC.  (Photo by Chris Kleponis-Pool/Getty Images)
WASHINGTON, DC - JANUARY 29: (AFP-OUT) Alex Azar, new Secretary of the Department of Health and Human Services, speaks after being sworn in as President Donald J. Trump looks on January 29, 2018 at The White House in Washington, DC. (Photo by Chris Kleponis-Pool/Getty Images)

The Trump administration approved Indiana’s request requiring some Medicaid recipients to work to get benefits on Friday, meaning thousands of people in the state could soon be without health insurance.

Under the new proposal, Indiana residents will need to work 20 hours a week, on average, or participate in a job training program in order to be eligible for Medicaid. The rule kicks off in 2019. The state would not require pregnant women, students, the homeless, and some other current recipients to work. The state expects the changes will affect 130,000 of the current 438,604 enrollees, and 33,000 of those people will lose coverage. Indiana officials say many Medicaid beneficiaries will transition to commercial health insurance.

The Trump administration announced last month that it would allow states to put in place work requirements for Medicaid recipients. Indiana is the second state whose Medicaid changes have been approved, following Kentucky in January. A handful of other states have also sought federal permission to amend their Medicaid programs, from adding work rules to mandating drug tests. One lawsuit has already been filed against the Department of Health and Human Services (HHS), intending to halt Kentucky’s policy changes.

Friday’s approved work rules expand on changes Indiana made to Medicaid in 2015. At the time, state lawmakers agreed to expand eligibility under the Affordable Care Act (ACA) if the state could also charge some adults monthly premiums and drop those who fail to pay for six months. The state’s Medicaid expansion plan, dubbed Healthy Indiana 2.0, extended care to roughly 240,000 people. But the way lawmakers decided to run their expansion kicked people off coverage. Kaiser Health News (KHN) reported that 71,000 people in the state lost or were prevented from enrolling in coverage because of the restrictive policy proposals implemented in 2015. 

Indiana’s Healthy Indiana 2.0 plan was spearheaded by former Governor and now Vice President Mike Pence and then health consultant and current Medicaid department head Seema Verma. Verma said she would recuse herself from handling state applications she helped craft, as it would violate her federal ethics agreement, but Senator Ron Wyden (D-OR) says she hasn’t and is investigating. Former Department of Health and Human Services (HHS) Secretary Tom Price said Indiana’s plan should be a model for other states. Many conservative states, including Kentucky, have followed Indiana’s lead by proposing to charge people who live in poverty premiums.

About 25,000 Indiana adults dropped coverage because they failed to pay insurance premiums. Only half were able to find another source of coverage. An additional 46,000 people were eligible for coverage but never enrolled because they couldn’t pay their first premium. While some people couldn’t afford to pay, others were confused by the administrative process, Kaiser Family Foundation’s Medicaid expert MaryBeth Musumeci said on Twitter. Many dropped coverage and remain uninsured:

Indiana’s new Medicaid changes are the first policy decision made by newly appointed HHS Secretary Alex Azar. The secretary also approved a premium surcharge to Medicaid beneficiaries who use tobacco and expanded access to substance use disorder programs.

“By announcing today’s approval, Secretary Azar is escalating the Republican war on health care and its effort to demolish Medicaid from the inside out. The Trump Administration is choosing to cause real pain in Indiana by letting the state make Mike Pence and Seema Verma’s cruel, failing Medicaid ‘experiment’ even worse,” advocacy group, Protect Our Care, said in a statement.