Indiana will postpone implementing its Medicaid work requirement and other proposed changes to the program, according to the state's Medicaid program on Thursday.
State officials said they will suspend implementation until a federal court decides whether parts of the state's Gateway to Work program and its Healthy Indiana Program violate the stated purpose of Medicaid.
Indiana planned to suspend some Medicaid enrollees benefits in January if they didn't comply with new rules. But the state won't enforce the work requirement until after the litigation is resolved.
"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 members are reporting successful engagements in their workplaces, schools and communities," Indiana Medicaid Director Allison Taylor said.
Last month, two legal advocacy groups sued to block Indiana's Medicaid work requirement waiver. The lawsuit also seeks to remove Indiana waiver provisions that require beneficiaries to pay premiums, establish lock-out penalties, get rid of retroactive coverage and stop coverage for non-emergency medical transportation.
Indiana estimated that 24,000 people would lose Medicaid coverage after the work requirement was fully implemented. CMS Administrator Seema Verma previously worked on Indiana's Medicaid program before taking the helm at the federal agency.
During oral arguments on Oct. 11, three federal appeals judges looked ready to throw out Medicaid work requirements for Arkansas and Kentucky because the waivers approved by the CMS didn't consider how they would affect coverage.
Arizona suspended its Medicaid work requirement soon after, citing the "evolving national landscape" and ongoing lawsuits against other states' work requirements.
Hospitals and patient advocates have warned that work requirements can lead to significant coverage losses, interrupt care for people with chronic conditions and balloon uncompensated-care costs.
But red states have pursued work requirements claiming that working improves Medicaid beneficiaries' health and well-being. Policy experts see it as a way to get conservatives to support Medicaid expansion by alleviating some of their concerns about waste, fraud and abuse in the program. Conservatives have largely opposed Medicaid expansion under the Affordable Care Act.
Hospitals and patient advocates argue that there's no evidence that work requirements increase the number of Medicaid-eligible people who work.
About 18,000 people lost Medicaid coverage in Arkansas following the implementation of the state's work requirement last year, even though the state's unemployment rate declined.
Indiana's supporters say that, unlike other states, its work requirement is smarter and gentler because it phases in the work requirement over a longer period, has a more forgiving reporting requirement and allows people to re-enroll in Medicaid as soon as they become compliant again.
