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Indiana Halts Medicaid Work Requirements In Light Of Pending Lawsuits

Carter Barrett/Side Effects Public Media

Indiana’s Medicaid program won’t cut off enrollees’ coverage for not meeting work requirements for the time being, state officials announced Thursday.

Indiana was set to suspend Medicaid benefits in January for some enrollees not working, volunteering or taking classes, sometimes known as work requirements. Seventeen other states have similar programs, but none are in effect, in large part because of court challenges. 

The state said it is temporarily suspending the requirements because of a lawsuit by Indiana Medicaid enrollees that is pending in federal court against the federal government for approving the requirements.

“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 (Healthy Indiana Plan) members are reporting successful engagements in their workplaces, schools, and communities,” Indiana Medicaid Director Allison Taylor said in a press release.

Earlier this year, the state of Arizona also delayed implementing its work requirements, which were set to go live in 2020. And a judge has twice blocked Kentucky’s attempts to implement work requirements. The lawsuit is currently under appeal in the U.S. Court of Appeals for the District of Columbia.

In New Hampshire, the state said it spent about $187,000 working this summer to help Medicaid enrollees gain employment or volunteer work and track that work in the lead-up to enforcement; then in July, a federal judge struck down the requirement. The same judge also struck down Arkansas’ requirements after they’d been in effect for eight months.

Dustin Pugel, a policy analyst with the Kentucky Center for Economic Policy, said it would be an administrative nightmare for a state to halt enforcement due to a court ruling, which might be why Indiana decided to do so on its own.

“They voluntarily suspended, I assume, thinking about what will be coming similarly for them that came to New Hampshire, Arkansas and Kentucky,” Pugel said. “I imagine they were doing it this way so that they could smooth out any administrative bumps that could come up from having to pull the plug quickly in response to a judge’s order.”

Work requirements in Medicaid are a largely untested idea some Republican-led states are attempting to employ. The theory is that getting enrollees into jobs will cause some people to gain employer-based coverage, and therefore no longer need Medicaid. Medicaid, the health insurance program for low-income people and those with disabilities, is often a huge part of states’ budgets. But research shows that a majority of Medicaid enrollees are working already, with some in jobs that don’t offer insurance.

Proponents of the requirements also say getting enrollees more engaged in their communities through volunteering and educational courses will result in better health outcomes.

Both ideas are experimental and don’t have much evidence behind them. Medicaid, which Congress created in the 1960s, has historically only offered health insurance without strings attached. A federal judge who heard arguments over the programs has struck down Kentucky’s work requirement program. He said that the original intent of the program was to offer health insurance and improve enrollees’ health; work requirements, he said, don’t advance that goal.

Adam Mueller, an attorney with Indiana Legal Services, said he expects Medicaid enrollees who could have been kicked off are likely relieved.

“For folks that may have been facing a potential suspension of their Medicaid because of this, this is a good thing for them,” Mueller said. “We’ve sort of seen that there’s been a lot of confusion around the program about how to comply and some of the other issues that folks have had. So this may be a good thing.”

Indiana notified Medicaid enrollees of the work requirements this summer. The Indiana Family and Social Services Administration said in a press release that it will continue to encourage enrollees to report their activities to the state or their health plan. Job training programs that were set up to help people find work will also continue to operate. The state said it would give enrollees “substantial” lead time if the program is restarted, pending a court decision.

The work requirements did not apply to all Indiana Medicaid enrollees. Out of about 400,000 enrollees, 80,000 would have had to track their hours and risk losing coverage if they didn’t.  

The first state to implement work requirements, Arkansas, kicked 18,000 enrollees off Medicaid for not complying.

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