FSSA halts Healthy Indiana Plan premiums after federal ruling

The Family and Social Services Administration announced Monday it will not enforce collections of premium-like payments in its Healthy Indiana Plan insurance program, a decision it made after a federal judge struck down the state’s requirement that users contribute to so-called POWER Accounts.

FSSA said the implications of the U.S. District Court ruling are far-reaching.

“FSSA is still evaluating the impact for the state and the 762,000 Hoosiers who rely on health care coverage through our Healthy Indiana Plan,” said Cora Steinmetz, the state’s Medicaid director, on Monday at a press conference.

The Healthy Indiana Plan, otherwise known as HIP 2.0, provides coverage for non-disabled, moderate-income adults between the ages of 19 and 64 and was first introduced in 2007 during Gov. Mitch Daniels’ administration. Under the plan, the federal government covers 90% of costs for enrollees.

At the time, the federal government granted the state a special waiver to require participants in the plan to pay a monthly, variable contribution to POWER accounts, which are used to pay health care expenses. (POWER is short for Personal Wellness and Responsibility.) Those payments had been on hold during the pandemic, but the state was set to restore them this week.

However, critics have said the contributions confused many enrollees and disproportionately caused Black Hoosiers to lose access to the life-saving coverage.

Chief Judge James E. Boasberg, of the U.S. District Court for the District of Columbia, ruled last week that federal regulators erred when they granted the state authority to charge the contributions, alongside state rules regarding retroactive coverage and non-emergency medical transports.

Advocacy groups applauded the ruling, which community organization group Hoosier Action called a burdensome barrier to care. Hoosier Action coordinated hundreds of public comments and testimonies cited in the judge’s ruling.

“I’m overjoyed,” said Hoosier Action leader and HIP member Mulugeta Wolfe. “I just got back on HIP and paying my POWER Account payment on time was one of the things I was concerned about. It’s not even making the payment amount that’s hard, it’s remembering.

“HIP is important to me as someone working part-time here and part-time there and going to school and HIP gives me that flexibility as a younger person to do the things I want to do with my life.”

HIP members will still have coverage, Steinmetz said, and the state will be pursuing “all” legal remedies in consultation with state and federal attorneys. The ruling doesn’t impact the premiums charged for disabled Hoosiers using MedWorks or minors relying on the Children’s Health Insurance Plan.

“Indiana disagrees with the ruling and believes these actions have unintended consequences for our program,” Steinmetz said.

Boasberg included some of the submitted comments in his final ruling, observing the “rather earthy language” and pleas to halt the program.

One user wrote that “[I’ve] seen 1st hand the many harms the power account has done to those who are trying to both link to and retain health care as well as ensure medication compliance and hold a job. Get rid of the [expletive] power account.”

Boasberg cited submitted evidence that found 60,000 Hoosiers, or 29% of those subject to premiums, were disenrolled due to nonpayment—whether it was failing to make the first payment or not making a later payment and having their coverage reduced. Over half of all beneficiaries missed at least one payment during 2015 to 2016, he said.

Steinmetz repeated an argument on Monday that failed to sway Boasberg, namely that state law requires FSSA to administer the POWER Accounts program.

“While HIP members remain covered today for Medicaid, the ruling creates uncertainty regarding which services are covered and removes authority for certain administrative aspects of the program’s operation,” Steinmetz said. “The ruling also has implications that conflict with Indiana state law.”

The state paused POWER Account contributions during the COVID-19 pandemic and the managed care entities overseeing such coverage haven’t collected those payments since 2020. Before the pandemic, someone within a certain income bracket who failed to pay would be moved to a lower-tier health plan while others would have a “lockout” period spanning several months.•

The managed care entities that implement HIP will bear the responsibility of communicating with members about the change, so Steinmetz couldn’t specify how enrollees would be notified of the change.

Mueller said the ruling alone doesn’t threaten the entire HIP program because that approval is part of the state’s amended Medicaid plan while the POWER Account contributions fell under a separately approved waiver.

But attorneys arguing for the state in the case disagreed.

Hoosier Action, the entity that organized HIP enrollees to submit comments to the federal judge, updated a Friday comment with additional context from Fran Quigley, a law professor at Indiana University and the director of the law school’s Health and Human Rights Clinic.

“In our law school clinic, we see Hoosiers every day who have to make horrible choices between paying rent, putting food on the table, and other bills. Judge Boasberg recognized that they and tens of thousands of Hoosiers like them were likely to lose their health care under the previous rules for the Healthy Indiana Program,” Quigley shared.

Rep. Ed Clere, a Republican representing New Albany, has repeatedly voiced concerns about the state’s administration of the HIP program, including the lack of retroactive eligibility available in other Medicaid programs.

A four-year pause could have shown how necessary and vital POWER Accounts were to the operation of HIP, he said, especially in light of extra scrutiny of the Medicaid budget following a nearly $1 billion shortfall. But he said the state didn’t do that.

“The pandemic provided an opportunity to demonstrate that POWER Accounts don’t add anything—other than confusion, administrative expense and disenrollment,” said Clere, who chairs the Health and Medicaid Subcommittee for the House Ways and Means Committee.

“There has never been any evidence that POWER Accounts or any of the other financial contribution requirements improve outcomes,” he said. “We should be willing to step back and look at ways to tweak the design of HIP 2.0 in a way that eliminates this unnecessary administrative expense and look for new opportunities.”

Mueller, the attorney and advocate, also saw the ruling as a chance to improve the Medicaid program. The 66-page ruling—which includes a reference to pop icon Taylor Swift—made it clear to Mueller that Boasberg “really under(stood) this program,” he said.

“The judge took an opportunity to really listen to what people thought and what people said in the administrative record. To me, that is really heartening,” Mueller said. “The judge has sort of given the [federal regulators] and Indiana an opportunity to make HIP work in accordance with Medicaid law. And that could be a lot of things. You know Hoosiers—we pride ourselves on being innovative.”

An area where Medicaid could potentially fill a need, Mueller said, are Hoosiers exiting Indiana’s prison system who aren’t currently auto-enrolled, in contrast to other states. Another area to explore could be housing assistance.

“There’s an opportunity here to see a post-pandemic future [where] this program could be really, really great,” Mueller concluded. “I hope that’s an opportunity that the state seizes in partnership with the” federal regulators.