Emily Kowalski didn't have insurance recently even though she had paid the state for it.

Last year, the Hammond single mother was on the Healthy Indiana Plan Plus, which offers medical, dental and vision coverage to low-income Hoosiers who make monthly contributions to a health savings, or POWER, account.

When she got pregnant, she was switched to the HIP maternity plan, which doesn't require the monthly payments. After she had a miscarriage, though, she was moved, without her knowledge, to HIP Basic, a version of the plan that charges copays for medications and services. 

When she found out, Kowalski, a casino host who makes just above minimum wage, knew she wanted to get back on HIP Plus, which doesn't charge copays. To upgrade, she had to make the first monthly payment to her POWER account, which she did. And she waited. And waited. And waited.

It took weeks for the insurer to process her payment. In the meantime, she went without three medications she couldn't afford.

"I couldn't get any answers," the 38-year-old said. "That doesn't make you feel confident when you're giving your money to somebody for a service, and you're not getting that service."

Even when she got a letter from the insurer saying she was approved, her doctor and pharmacy's computer systems didn't show it right away.

"This is supposed to benefit low-income people and people who can't afford insurance," she said. "This is supposed to help. It's done nothing but give me anxiety, which is one of the medications I haven't had in two weeks."

HIP 2.0, Indiana's Medicaid expansion under Obamacare, features layers of bureaucracy not seen in most public insurance plans. As in Kowalski's case, coverage for HIP Plus doesn't start until beneficiaries make their first payment. If a person making less than poverty level doesn't make a payment within 60 days, they are enrolled in HIP Basic. Medicaid usually allows coverage retroactive to the application date.

While HIP 2.0 has been Indiana's means of expanding Medicaid coverage to hundreds of thousands of nondisabled Hoosiers, its intricacies have left many recipients confused and even uninsured, through no fault of their own. In a January report, the Kaiser Family Foundation found that these complex enrollment policies and the monthly premiums can deter people from even signing up for HIP.

"These plans are complicated. They require a lot of collaboration with stakeholders, a sophisticated IT system, potentially high administrative costs," said Robin Rudowitz, one of the authors of the Kaiser study. "It adds layers of administrative complexities for the state and beneficiaries."

U.S. could see more plans like HIP

HIP 2.0 has been getting national attention in recent months as the Indiana governor who championed it, Mike Pence, is now the nation's vice president. In addition, Seema Verma, the health policy consultant who designed HIP 2.0, is President Donald Trump's choice to lead the Centers for Medicare and Medicaid Services, or CMS. HIP 2.0 was built on Indiana's original HIP program, which expanded Medicaid to some childless adults in 2008. 

The federal government had to give Indiana a waiver to operate HIP 2.0 since it included provisions, like monthly contributions and lockouts for nonpayments, not allowed under Medicaid law. CMS declined some of Indiana's requests, such as a 12-month lockout period for nonpayment (the feds allowed six months) and a work requirement. Even so, HIP 2.0 included the most exceptions CMS had ever allowed in a Medicaid waiver.

Now with Trump and Congressional Republicans indicating they want to allow states more leeway on Medicaid, and Verma set to lead CMS, HIP 2.0 could be seen as a template for other conservative states. The Republican House's plan to replace Obamacare, the American Health Care Act, would give block grants for Medicaid, essentially lump sums for states to spend how they see fit.

"I do think we will be seeing more waiver approvals in this administration," said Joan Alker, executive director of the Center for Children and Families at Georgetown University. "I think this administration has been very clear they intend to give states more flexibility. Unfortunately, flexibility in this case means flexibility to charge people more and impose barriers to coverage."

She believes HIP "reflects a misunderstanding of the folks who are on Healthy Indiana, who are by definition very poor, very low income and may have difficulty making a premium payment."

HIP is available to Hoosiers who make less than 138 percent of the federal poverty level, about $16,000 for an individual or $33,000 for a family of four. The monthly payment is 2 percent of income. Most people on HIP Plus pay $1 a month because their income falls between 0 percent and 5 percent of federal poverty, according to the state.

"Certainly with Seema Verma as head of CMS, my guess is she will be quite interested in pushing forward with other states using her ideas," said Dr. Rob Stone, a Bloomington palliative care physician. He favors a more traditional approach to Medicaid because, he said, it "has less bureaucratic overhead and is less punitive."

Missed payment equals loss of insurance

Nicole Kuzma, a single mother from Whiting, had always made her monthly HIP payments, until December, when she used the money instead to buy her kids Christmas presents. She believed both she and her children were locked out of the program, causing her to forego care for them. (However, HIP and its lockout provision apply only to adults.)

"My son's going to be starting preschool and needs shots and dentist appointments and stuff. My daughter would like to play sports, but she needs a physical to do it," said Kuzma, 29, who works three part-time jobs. "I make too much money for Medicaid. That's why I was on Hoosier Indiana Plus, Healthy Indiana Plus. I don't think this is fair."

According to the state, as of last September, about 12,000 of the roughly 420,000 people enrolled in HIP have been locked out for missing a payment. People below the federal poverty level are dropped to the HIP Basic program for six months, while those earning above poverty are locked out of state health insurance completely for six months.

In its application for a three-year renewal of its HIP waiver, Indiana is requesting a six-month lockout for enrollees who don't renew on time. CMS denied a similar request last year. The state estimated that about 5 percent of beneficiaries, or about 18,850 people, miss their renewal.

"Even if they're not homeless, a lot of low-income families have to double up with friends and families. It's no small feat getting your mail and keeping track of paperwork deadlines when you're in this kind of economic situation," Georgetown's Alker said. "It's too high a price to pay to take away someone's health insurance coverage."

The Kaiser report on HIP 2.0 found that "renewal notices were described as confusing, leading some eligible beneficiaries to lose coverage at renewal."

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Tabitha Brigham, of Merrillville, believed she had supplied the proper information for her HIP renewal earlier this year but was dropped anyway. She is trying to re-enroll.

"I'm on antipsychotic medications. If I stop taking them I could die," the 43-year-old said. "One medication alone costs $300. I've been taking less of my medicine in case I don't get approved."

Tyler Ann McGuffee, health care policy director for then-Gov. Pence, wrote a letter to CMS last year requesting the lockout for nonrenewal. She said the "policy prepares individuals for the commercial health insurance market, as the lockout mirrors open-enrollment policies within the (Obamacare) Marketplace, employer sponsored health insurance and other commercial market health plans."

HIP's architects say the plan is meant to help Medicaid beneficiaries learn how to use and ultimately transition into private insurance.

"Consumer engagement is the largest departure from the traditional Medicaid program, where you give someone a card and everything's paid for," Verma told The Times in 2015. "Here, they have skin in the game."

Confusion abounds

Jennifer Hudson, a high-school lunchroom lady from South Haven, went to the doctor in 2015 only to be told she no longer had insurance. This was news to her. She found out she had been dropped to the more basic Medicaid and wouldn't be allowed back onto HIP Plus for six months.

She didn't know what she did wrong. She called the managed care company running her plan, only to be told a computer glitch caused her insurance downgrade. She wanted to re-enroll in HIP Plus, but was told she'd have to wait six months. It wasn't until she reached out to the office of U.S. Rep. Pete Visclosky, D-Ind., that she got her original insurance back.

"It was the biggest nightmare I've ever dealt with," said Hudson, 42. "It made me so angry. They kept telling me, 'It wasn't your fault.' So why did I have to wait six months? What if it wouldn't have been for Mr. Visclosky? Either way, I didn't get it right back."

Adam Mueller has dealt with a lot of cases like Hudson's. He's the director of legal services for Indiana Legal Services. The nonprofit, which is free for low-income Hoosiers, has two attorneys on staff devoting much of their time to handling HIP 2.0 disputes.

"The main issues we see are folks who've made their POWER account payments or otherwise comply with the program and are having difficulty accessing coverage," he said. "There may be some snafu with the processing. That can be really unnerving for folks who are trying to maintain coverage and treat chronic conditions."

HIP, a program of the Indiana Family and Social Services Administration, is operated by three private managed care companies: Anthem, MDWise and Managed Health Services, or MHS.

"It's not necessarily clear where the errors are sometimes. It might be with the insurance companies, or it might be with the state," Mueller said. "We have to spend hours on the phone trying to resolve the issues for our clients. That's often after our clients spend hours trying to do that themselves."

Jim Gavin, a spokesman for the state Family and Social Services Administration, said: "We will occasionally hear of members whose coverage is deactivated due to system errors. We have a customer support team responsible for researching and correcting these issues when they occur."

Dropped for unknown reason

Dwayne Babiarz, a Knox carpenter, went to make a payment for HIP Plus recently when he learned he had been terminated from the program. Neither his insurer nor the state could immediately tell him why, he said.

"I'm scrambling for health insurance now," the 52-year-old said. "I have severe arthritis. I'm on maintenance meds. I don't know what I'm going to do."

Susan Jo Thomas is the executive director of Covering Kids and Families of Indiana, a nonprofit that assists Hoosiers in signing up and maintaining coverage for HIP. She has heard from a lot of people in the state who have been dealing with issues like Babiarz.

"We have encountered problems where folks went to pay POWER account payments, but were not able to get it assigned to the right insurance company," she said.

Many HIP beneficiaries don't have checking accounts or credit cards.

"Let's say you enroll and your mother or your friend is with you and they're going to make the payment on your behalf," Thomas said. "The check is written in your friend's name, and your name and Social Security number isn't on it. That gets mailed to Anthem, and Anthem has a box full of people's premium payments they want to get associated to the right person, but they have no idea Jim Jones is sitting next to you and what his relationship is to you."

She said the transient nature of the low-income population who utilize HIP sometimes causes them to miss important pieces of mail asking for more information. And some people still lack Internet access. "The 10 percent on either side ... those are the folks we deal with," she said. "The majority of folks can get themselves enrolled or stay enrolled."

Despite the bureaucratic snafus, Thomas said HIP 2.0, which expanded health coverage to hundreds of thousands of Hoosiers, is better than the alternative, which in Indiana would have been no expansion at all.

"The bureaucracy involved in the past, pre-HIP, was just nothing. There wasn't even an option for people who weren't disabled," she said.

"We've all had the experience of having to watch people get sick enough to qualify for disability. We could have stopped at diabetes control and coaching of diet and medications, but it turns out these people had to have limbs amputated. That's the reality we were looking at pre-HIP. It's really hard to compare."