Trump approves Indiana Medicaid work requirements

The Trump administration approved a request by Indiana to require certain Medicaid recipients to work or volunteer at least 20 hours a week in order to qualify for benefits, state and federal officials announced Friday.

In a speech Friday, Health and Human Services Secretary Alex Azar said Indiana’s program “recognizes that Medicaid can become a pathway out of poverty.”

Standing beside Gov. Eric Holcomb (R), Azar touted the work requirements as an important way to boost employment and to improve people’s “well-being.”

“Indiana’s vision and ours goes beyond the provision of quality health care,” Azar said. “Work is a key component of well-being.”

An approval letter from the Centers for Medicare and Medicaid Services (CMS) says the waiver is designed, in part, to test whether work requirements “will lead to improved health outcomes.”

Work requirements are a controversial move and were never approved by the Obama administration.

Indiana is just the second state in the country to get Medicaid work requirements approved. Kentucky became the first last month after CMS released guidance encouraging states to institute measures.

CMS says there is ample evidence that work requirements will help people lead healthier lifestyles. That argument is integral to CMS’s authority for approving such requirements, but a lawsuit in Kentucky aims to test that.

Indiana officials estimated that about 130,000 people could be subject to the work requirements, but that number doesn’t include the people who are already employed or who are exempt.

Pregnant women, “medically frail” people, students, some caregivers of dependents and beneficiaries in active substance abuse treatment will be exempt, the state said.

The work requirement will be phased in over the course of the demonstration, state officials said. In order to meet the requirements, individuals will need to work up to 20 hours a week, be enrolled in school or be in the state’s job training program.

If they can’t comply with the work requirements, individuals will be suspended from the program until they can meet the requirements for a full month.

The demonstration will run through 2020.

Democrats and health-care activists slammed the waiver approval, the first major action taken by Azar since he was sworn in earlier this week.

“Secretary Azar is escalating the Republican war on health care and its effort to demolish Medicaid from the inside out,” said Brad Woodhouse, campaign director of the advocacy group Protect Our Care.

“Regardless of how many of these waiver requests CMS approves, they represent a profoundly mistaken understanding of the role of health in families’ lives and violate Medicaid law; approval after approval will not change that,” said Frederick Isasi, executive director of Families USA.

Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee, also blasted Azar’s role in the waiver approval.

“Secretary Azar has given Indiana the greenlight to discriminate against low-income Americans who are just trying to stay healthy and get ahead,” Wyden said in a statement.

“Policies that lock people out of the health-care system for months at a time or place onerous barriers in the way of coverage do not make Medicaid better at providing health care,” Wyden said.

The waiver, known as the Healthy Indiana Program (HIP) 2.0, will also include new funding authority to expand treatment options for Medicaid enrollees struggling with substance abuse, including opioid addiction. Holcomb said there will be up to $80 million a year available for the program.

Under the extension, Medicaid beneficiaries will be required to pay tiered premiums based on income level and can be locked out for failing to pay.

People who use tobacco products and don’t participate in “tobacco cessation activities” will be required to pay an additional premium, to encourage healthy behavior.

Indiana’s waiver builds on a program that was spearheaded by then-Gov. Mike Pence, the current vice president, and his top health-care adviser, Seema Verma, who now runs CMS. Verma recused herself from considering Indiana’s waiver.

The Obama administration in 2015 approved the state’s request to implement some of the most conservative changes ever seen to the Medicaid program. As part of the deal, Indiana would expand Medicaid coverage to an additional 240,000 people.

However, the administration allowed Indiana to require beneficiaries to make monthly contributions into accounts similar to Health Savings Accounts.

The state also charged premiums and instituted a six-month lockout provision for noncompliance. The state was also allowed to test an optional work requirement, which offered beneficiaries job training and job placement services.

Updated at 4:57 p.m.