Indiana Joins Kentucky as Second State With Medicaid Work Requirements

In an announcement that was widely expected, Indiana became the second state in the country to receive approval to implement work requirements for people receiving Medicaid.

HHS Secretary Alex Azar made the joint announcement with Eric J. Holcomb, Indiana's Republican governor, to announce that CMS had approved the Section 1115 waiver, known as the Healthy Indiana Plan (HIP).

There is now a requirement for “work or other forms of community engagement for able-bodied, working age Medicaid enrollees,” according to the approval letter. It also includes administrative reforms, as well as a new funding authority to expand treatment options for Medicaid enrollees with substance use disorder (SUD), including opioid addiction.

Certain groups, including pregnant women, beneficiaries identified as medically frail, students, some caregivers of dependents, and beneficiaries in active SUD treatment will be exempt.

To maintain coverage, non-exempt members will be required to participate in community engagement activities that may include (but are not limited to) employment, education, job skills training, or volunteer work for a weekly hours requirement that will eventually become a requirement of 20 hours per week. Compliance will be required for 8 months of the 12-month calendar year (for a non-exempt beneficiary that participates for the full year). Beneficiaries will have 4 months (within a 12-month calendar year) in which they do not have to meet the community engagement requirement.

Beneficiaries who fail to meet their required community engagement hours in the preceding calendar year will have their eligibility suspended in the new calendar year until the month following notification to the state that they have completed a calendar month of required hours.

The state will also start applying a surcharge on enrollees who use tobacco.

Last week, HHS was sued on behalf of people with Medicaid coverage in Kentucky. The lawsuit states that the waiver will radically reshape Medicaid in a manner that will result in substantial reductions in coverage. The lawsuit also claims that Acting HHS Secretary Eric Hargan’s letter to state Medicaid directors regarding adding work requirements to the program and the subsequent approval of Kentucky’s waiver “vastly exceed any lawful exercise of the Secretary’s limited waiver authority.”

It was reported this week that Indiana's monthly fees and lockout provisions led to a decline in Medicaid rolls.