Indiana scales back work requirement following public outcry

Indiana has relaxed its proposal to impose a work requirement on Medicaid beneficiaries following public backlash for the new provisions. But policy experts remain concerned that access to care will suffer.

Under the revised amendment submitted to the CMS on Thursday, Indiana would not require students, pregnant women, homeless individuals and some other Medicaid beneficiaries to seek work or be employed as a condition of program eligibility.

The move is part of Indiana's renewal application for its Healthy Indiana Plan 2.0 waiver, and state health officials believe its healthcare costs could go down if the request is approved. The state seeks to require all able-bodied HIP participants to either work on average 20 hours per week; be enrolled in full-time or part-time education; or participate in a job search and training program.

After receiving nearly 60 comments, most of them critical of the request, the state has decided to tweak the requirement provisions.

Indiana estimates that 30%, or 130,000 of the 438,604 Medicaid enrollees, will have to comply with the new requirement after factoring in all the exemptions. However, as many as 33,000 of the people still eligible for the requirement will chose not to comply, and thus lose their benefits. The state did not clarify in its waiver why these people would choose not to comply.

Currently, 244,000 Indiana Medicaid beneficiaries are unemployed and an additional 58,000 members work fewer than 20 hours per week.

But Indiana's relaxed waiver hasn't appeased some of its critics.

"Any work requirement is bad policy as it will be counterproductive and administratively costly and doesn't serve the objectives of the Medicaid program, which is to provide access to health coverage for low income people," said Joan Alker, executive director of the Georgetown Center for Children and Families.

There has already been evidence in the state that high administrative burden leads to coverage loss, even if a person tries to comply, according to Adam Mueller, advocacy director for Indiana Legal Services, a pro bono law group. For instance, there have been several reports of people paying their cost-sharing responsibilities on time and still losing coverage.

Six states including Arizona, Kentucky and Ohio have proposed similar controversial work requirements. Unlike Indiana, Kentucky strengthened its proposed work requirement following both a state and federal public comment period.