The CMS has a denied a request from Indiana to lock people out of Medicaid coverage for six months if they fail to complete a renewal process.
In April, the state requested federal approval to lock out beneficiaries who fail to complete the renewal process in a timely manner. The measure would impact people above and below poverty and is meant to ensure enrollees would return required documents by the state-determined deadline.
Tyler Ann McGuffee, insurance and health policy director for Indiana Gov. Mike Pence, said in a letter that the move was an essential component of the Healthy Indiana Plan because it “encourages individuals to maintain healthcare coverage and avoid coverage gaps.”
If approved, the move would have caused approximately 18,850 people to lose coverage every year, according to a CMS analysis. The state already has permission for a six-month lockout for people above poverty who don't pay into health savings accounts outlined in the state's Medicaid expansion strategy.
In the demonstration's first year, 2,677 individuals were dis-enrolled from HIP for failing to pay their contribution, according to a state analysis.
The CMS responded to Indiana's request by noting that it has never signed off an 1115 waiver that allows lockouts for individuals who do not complete the renewal process and the agency would not begin to now.
“Authorizing a lockout for individuals at any income level...is not consistent with the objectives of the Medicaid program, which include ensuring access to affordable coverage,” Vikki Wachino, CMS' Medicaid director said in a letter.
The agency noted that many low-income individuals face challenges in completing the renewal process because of language barriers, as well as frequent moves that make it difficult for them to receive mail. Low-income people are also more likely to experience disabling conditions, including mental illness, or face temporary or chronic homelessness.
Indiana will continue to pursue this issue and will be adding it to the next waiver, according to Jim Gavin, director of communications at the Indiana Family and Social Services Administration.
Advocates were pleased with the CMS' decision.
“At a time when our healthcare system needs to move toward more effective use of our healthcare dollars with improved quality measurement and continuous coverage, a lockout takes us precisely in the wrong direction,” said Joan Alker, executive director of the Georgetown Center for Children and Families. She added that the decision is especially important because other states are watching.
Indiana and the CMS have been locked in an ongoing battle over a federal evaluation of HIP.
A third party evaluated the program's impact on healthcare access and state officials say a federal one is unnecessary and will likely be biased based on the questions it plans to ask beneficiaries.
CMS argues its own evaluation is imperative as other states like Kentucky look to adopt Indiana's strategy.
The plan, which funneled federal funding into the state budget while allowing Republican Gov. Mike Pence, now Donald Trump's presidential running mate, to retain some more conservative measures such as the HSA contributions.