A Medicaid compromise expanded coverage for Hoosiers, but important questions linger

February 08, 2018

In today’s polarized political environment, it is easy to forget that most policy decisions are not black or white, but rather some indeterminate shade of gray. A case in point is Indiana’s Medicaid waiver, which the federal government just approved for a three-year extension.

With its Healthy Indiana Program, the state adopted Medicaid expansion as authorized by the Affordable Care Act, but with financial requirements for newly eligible members that are not routinely permitted by Medicaid law; thus the need for special federal permission. Indiana charges its Healthy Indiana members, who have incomes up to 138 percent of the federal poverty level (a little under $17,000 per year for an individual), a premium for their coverage. Failure to pay the premium for two consecutive months has significant repercussions for a person’s health care: loss of certain benefits (vision and dental) for those below 100 percent of the poverty level or, more seriously for those with higher incomes, a loss of all Medicaid benefits for six months.

According to Kaiser Health News (KHN), the political tradeoffs that define Healthy Indiana are seen as a net positive by some key stakeholders in the state; one advocate for children and families said that the program has “literally saved lives.” To be sure, without this deal Indiana likely would have chosen not to expand Medicaid at all, leaving most of the 240,000 low-income Hoosiers who became eligible in 2015 with the introduction of Healthy Indiana without coverage instead. Peer-reviewed studies have found that Medicaid expansion is associated with lower mortality rates, and Indiana’s uninsured rate fell from 14 percent of its population in 2013 to 8.1 percent in 2016.

And yet, in 2015 and 2016, 10,000 people received the six-month lockout sanction for not paying required premiums, according to KHN. Another 46,000 who were found eligible for coverage in 2016 and 2017 were not enrolled because they did not pay an initial premium. It is well documented that people without health coverage have less access to timely care in appropriate settings, which is particularly detrimental to those with chronic or complex health care needs.

This is real-world policy making in states with conservative leaders who are considering whether to expand their Medicaid programs – gray, not black and white. But even when most observers agree that Healthy Indiana has provided a net social gain, the fate of those who lost and were locked out of coverage should be a concern, and information about them should be a factor in adjusting the program in the future. What are their characteristics? Were the premiums they were charged affordable? Are they more or less healthy than the average low-income Indiana resident? Has their health been affected by their having been excluded from the program? Do costs they may have imposed on the state in other areas offset the savings from their absence from the Healthy Indiana rolls? Answers to these important evaluation questions will provide a more complete picture of the overall impact of Healthy Indiana.