Mike Pence's home state can now require Medicaid recipients to work

Medicaid patient: 'I miss working'
Medicaid patient: 'I miss working'

Vice President Mike Pence and Seema Verma revolutionized Medicaid in Indiana a few years ago.

Now, the Trump administration, in which they both serve, has allowed the state to implement even more changes in the safety net program -- most notably by requiring some Medicaid recipients to work.

The state, which has served as a Medicaid expansion model for Republicans, announced Friday that it will require certain Medicaid recipients to get jobs or participate in other community activities starting in 2019. The mandate applies to up to 130,000 working age Hoosiers who are not disabled, medically frail, pregnant or parents of young children. Those who fail to comply could be locked out for three months.

Indiana becomes the second state to be granted permission to impose work requirements, which Verma championed first as a consultant for states looking to overhaul their programs and now as administrator of the Centers for Medicare & Medicaid Services, which rules on such requests. Kentucky's waiver got the nod last month.

The approvals mark the first time ever that states have been allowed to mandate recipients to work in exchange for benefits. At least 11 other states have filed similar requests or are looking to do so.

Related: Kentucky is first state ever to require Medicaid recipients to work

State waiver requests must promote Medicaid's mission, which is to provide the poor with access to medical care. The Trump administration and Republican officials are positioning work requirements as an opportunity to improve Medicaid recipients' health.

"Medicaid can become a pathway out of poverty," said newly confirmed Health Secretary Alex Azar, a former executive for Indiana-based Eli Lilly. Having a sense of purpose, often obtained through work, helps bolsters one's health and life, he added.

Consumer advocates, however, say such measures will leave many more Americans uninsured. Already, three groups are suing the administration seeking to stop the approvals.

Indiana's newly approved waiver builds upon a dramatic overhaul of its Medicaid program under then-Governor Pence in 2015, which brought more than 400,000 people into the system.

Pence, who is now vice president, agreed to expand Medicaid and even offer participants the option of limited dental and vision benefits. But, in return, the Obama administration granted the state the first-ever approvals to charge premiums to newly eligible adults with incomes as low as $0, impose a six-month lockout period for those with incomes above the poverty line who miss two months of premiums and require co-pays of up to $25 for repeated non-emergency use of the emergency department.

Currently, enrollees in Healthy Indiana 2.0, as the expansion program is known, must pay monthly premiums of 2% of household income as a contribution to an account similar to a health savings account.

Indiana recently released data showing how recipients fared under the revamped program.

Related: Lawsuit seeks to stop Medicaid work requirements

About 25,000 adults were kicked off the rolls between Healthy Indiana 2.0's start in 2015 and October 2017 for failure to pay their premiums, according to state reports. Yet, officials estimate that based on surveys of recipients, about half of those who were disenrolled found another source of coverage, most often through a job.

During those first two years, about 10,000 Indiana Medicaid enrollees were subject to the six-month lockout for failing to pay the premium for two months in a row. The state did not provide lockout data for 2017.

In addition to those who were disenrolled, another 46,000 adults who signed up for Medicaid during 2016 and 2017 were not accepted because they did not pay their initial premium, the state reported.

Joe Moser, who was Indiana's Medicaid director when the program was instituted and is now a consultant, said the expansion is achieving many of its goals, including reduced use of hospital emergency rooms for non-emergencies and more enrollees opting for preventive services to stave off more expensive care later.

Also, the state's decision to increase doctors' pay to the same rates as Medicare has resulted in many more specialists to treat Medicaid recipients and has reduced access problems, said Susan Jo Thomas, executive director of Covering Kids and Families of Indiana, an advocacy group.

Under the newly granted waiver, smokers who don't participate in tobacco cessation activities will face premium surcharges as an incentive to engage in healthy behaviors. Also, the state will start assessing premiums based on income, though it notes that most beneficiaries will pay no more than 2% of their household income.

Also, Indiana will receive $80 million in federal funding annually for three years for substance abuse treatment. Medicaid recipients will also be allowed to receive treatment in more centers.

Kaiser Health News contributed to this story.

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