In a June 27 ruling, a federal judge struck down the approval for Indiana’s Healthy Indiana Plan — which could unravel the whole program. Photo from IN.gov.

By Whitney Downard and Casey Smith
Indiana Capital Chronicle

INDIANA — A program providing hundreds of thousands of Hoosiers health insurance could be in jeopardy after a Washington D.C. judge on Thursday vacated a federal approval for the Healthy Indiana Plan.

Chief Judge James E. Boasberg, of the U.S. District Court for the District of Columbia, found fault with the U.S. Department of Health and Human Services’ 2020 approval of various aspects of HIP 2.0 — including POWER Accounts and the lack of retroactive coverage.

Former Gov. Mitch Daniels first introduced the consumer-driven, cost-sharing approach in 2007 when the state expanded Medicaid to moderate income workers. Gov. Mike Pence developed the program even further.

The full extent of the ruling was unclear Thursday night and a spokesperson with the Family and Social Services Administration said the agency was reviewing the ruling.

POWER Accounts, a sort of premium for Medicaid enrollees above a certain income threshold, have been paused since the COVID-19 pandemic started in 2020 but were set to restart for HIP’s 762,276 beneficiaries on July 1.

Earlier this month, FSSA said in a statement that state law requires the agency to charge for a POWER Account contribution, a claim it repeated in the legal battle. Striking the POWER Accounts could therefore unravel the whole HIP program, the state argued.

Boasberg disagreed.

“Because Plaintiffs — like all members of the expansion population — derive their eligibility for Medicaid through Indiana’s state plan … they would remain Medicaid eligible even if the Secretary’s 2020 approval is vacated, unless and until the State takes additional action to terminate their coverage,” he wrote.

Risks To Coverage

HIP offers a two-tiered plan to all non-disabled adults in Indiana with incomes at or below 138% of the federal poverty level. It restricts coverage, however, in several ways, including by charging monthly income-based premiums and offering no retroactive coverage.

The judge pointed to data showing that premiums have “threatened” coverage for thousands of Hoosiers.

For example, between February 2015 and November 2016, almost 10,000 individuals with incomes above 100% the FPL were disenrolled from HIP Plus for nonpayment of their premiums, and another almost 4,000 were disenrolled from HIP Basic for the same reason, according to data from various evaluations of HIP 2.0 cited by Boasberg.

During that same period, an additional nearly 48,000 Hoosiers were found eligible for HIP 2.0 but never enrolled because they did not make their first premium payment, Boasberg said.

“In other words, nearly 60,000 Hoosiers — a whopping 29% of all Hoosiers subject to premiums — were disenrolled from or never enrolled in HIP 2.0 because of non-payment,” he wrote. “And over half of all beneficiaries, or 324,840 Indiana residents, who were required to pay premiums missed at least one payment in 2015–16.”

Loss of coverage continued between 2017 and 2018 when 26,037 HIP Plus enrollees were disenrolled for failure to pay, according to Boasberg’s citations.

Case Background

Three Hoosier plaintiffs utilizing HIP sued HHS over its approval of POWER Accounts and work requirements as well as state rules barring retroactive coverage and blocking payments for non-emergency medical transport. The judge ruled in favor of those three plaintiffs — though work requirements under HIP had previously been struck by the Biden Administration.

An example of retroactive coverage in action could be someone with no health insurance seeking emergency care and later learning they qualify for HIP. Once approved for the government insurance program, HIP will go back and cover health expenses for a set number of months and potentially pay for that emergency visit. Such a provision is allowed under Indiana’s other Medicaid health plans and for pregnant women using HIP.

The state also pays for non-emergency medical transport, such as a doctor’s visit, for other health care programs but not for those enrolled in HIP.

Plaintiffs, represented by the Indiana Justice Project, noted that even HHS seemed uncertain about the benefit of POWER Account premiums in a December 2023 letter giving the state final approval.

The Centers for Medicare and Medicaid Services ultimately allowed the state to pursue the cost-sharing tool over its own objections in order not to derail the unwinding process.

Boasberg also questioned this decision, noting that POWER Accounts hadn’t been used since 2020 and reversing the approval wouldn’t be disruptive.

The judge seemed to suggest the state of Indiana could continue the program but without the premiums.

“It is far from clear why retaining the status quo — (namely) declining to charge beneficiaries premiums and impose associated penalties — would ‘result in beneficiaries being inadvertently disenrolled.’”