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Federal government approves work requirement for Healthy Indiana Plan participants

Gov. Eric Holcomb, center, speaks Friday at Indianapolis' Eskenazi Hospital after U.S. Health and Human Services Secretary Alex Azar, left, announced that the Healthy Indiana Plan, with an employment mandate, is authorized to continue operating through 2020. At right is Dr. Jennifer Walthall, director of Indiana's Family and Social Services Administration.

Dan Carden, The Times

INDIANAPOLIS — The eyes of the nation will be on the Hoosier State for the next three years to see whether an employment mandate linked to government-supported health coverage improves individual health outcomes or instead increases the uninsured population.

On Friday, U.S. Health and Human Services Secretary Alex Azar announced at Indianapolis' Eskenazi Hospital that he's authorized the state to add a work requirement to the Healthy Indiana Plan that provides Medicaid health coverage to some 440,000 Hoosiers.

"Healthy, fulfilling lives require not just health coverage, and health care, but also a sense of purpose, often obtained through work," Azar said.

"It recognizes that Medicaid can become a pathway out of poverty, paving the way for better, long-term health for all enrollees."

Under the plan, able-bodied adults who do not qualify for an exemption will, starting in 2019, be required to work, or take part in other "community engagement" activities, for at least 20 hours per week in eight months of the year, or else lose their health coverage.

Besides work, the mandate can be satisfied through participation in job skills training, job search activities, education programs, community service, homeschooling, volunteering or caring for the disabled.

State data show that only about 140,000 HIP members will have to comply with the employment mandate.

The majority of HIP participants instead will qualify for one of the numerous exemptions, including being medically frail, older than age 60, a full- or part-time student, the primary caretaker of young or disabled children, a pregnant woman, a participant in substance abuse treatment, recently incarcerated, or a former foster child.

Dr. Jennifer Walthall, the director of Indiana's Family and Social Services Administration and a Valparaiso native, said her goal in managing HIP is that no one served by the program will lose their health coverage for failing to satisfy the work requirement.

However, an actuary retained last year by FSSA estimated that a quarter of the HIP membership subject to the work requirement, or about 35,000 Hoosiers, will fail to comply, lose their health insurance and once again have to rely on costly emergency rooms for health care.

"We are not looking for decreased insurance. In fact, Indiana is at historic lows for our uninsured population," Walthall said. "The program that we're going to build is meant to be that supportive safety net to get individuals to move forward."

Walthall explained the work requirement will be rolled out over the next 12 months to give HIP members plenty of time to understand what is expected of them.

"Any program like this, that is new, it needs to be done right instead of fast," Walthall said. "Our goal is improved health outcomes, and we know that the beginning to that is health access, and then we have to build from there."

Walthall said she expects existing state appropriations, and support from Indiana managed care providers, will cover the costs of tracking and monitoring employment mandate compliance for the roughly 1 in 15 Hoosiers covered by HIP.

Separately, the federal authorization to continue HIP through 2020 also allows the state to access up to $80 million a year in funds to treat substance use disorder.

In addition, the federal HIP waiver permits the state to increase by one-third the minimal monthly premiums paid by HIP members who choose to smoke cigarettes.

Republican Gov. Eric Holcomb, who submitted Indiana's request to create a HIP employment mandate within weeks of taking office last January, said he was "stoked" by its approval, and declared, "It's a great day for Indiana."

"A decade after it launched, Indiana's HIP program has become the national model for a state-led, consumer-driven health care program that meets citizens' needs, provides choices and improves lives," Holcomb said.

"This approval continues coverage for hundreds of thousands of Hoosiers and unlocks funding to expand resources to help people struggling with addiction."

U.S. Sen. Joe Donnelly, D-Ind., likewise celebrated HIP renewal because he said it will "allow Indiana to expand substance abuse treatment services, which will help in our continued fight against the opioid abuse epidemic."

More than 90 percent of health care costs covered by HIP are paid using federal tax revenues generated under the Affordable Care Act, also known as Obamacare.

The ongoing Republican effort to fully repeal Obamacare could eliminate federal funding for HIP. Though Holcomb, who supports Obamacare repeal, believes Indiana then could re-create a HIP-like program without having to comply with so many federal mandates.

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Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.