IN 1115 Waiver Amendment Helps Members Transition to Commercial Plans
The Section 1115 amendment initiates a healthcare funding account for members transitioning from the state health plan to a Marketplace or commercial insurance.
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- Indiana submitted an application for an amendment to the state’s Healthy Indiana Plan Section 1115 Demonstration that would help transition members off of the HIP and into commercial coverage. The HIP Workforce Bridge is the first demonstration that takes this approach to mitigating transition disincentives.
“Since 2008, the Healthy Indiana Plan, Indiana’s consumer-driven health care plan has demonstrated remarkable success providing coverage to its beneficiaries, empowering enrollees to become active participants in their health care coverage and improving member health outcomes. Gateway to Work and HIP Workforce Bridge continue this record of ground-breaking innovation in Medicaid,” wrote Jennifer Walthall, MD, MPH, Secretary of the Indiana Family and Social Services Administration in the application’s cover letter.
Under HIP, families contribute at most a $20 premium per month—or $30 if there is a tobacco surcharge. The price is divided between spouses. Individuals pay an $8 copayment in the case of an unnecessary emergency department admission. Out-of-pocket costs are capped at five percent of the family’s quarterly income.
Individuals and families transitioning from HIP to the Marketplace or commercial coverage face a rise in membership costs, with some having to pay over eight times what they contributed under HIP,. This equates to about 6.3 percent of the income for a couple transitioning to the Marketplace and living on 200 percent of the federal poverty level.
On top of premiums, out-of-pocket costs on the Marketplace cost from $3,500 to $5,200 annually.
The state’s goal with Gateway to Work, a work referral program, was to improve health by raising employment. The program became mandatory for non-exempt HIP members starting in January 2019. Gateway to Work has been slowly building up to its 80 hour per month work requirement, which it will reach in July 2020.
However, as members work more hours and increase their wages, they surpass the income level required to qualify for HIP membership. The risk of losing their coverage disincentivizes members from staying in the Gateway to Work program.
The HIP Workforce Bridge Account helps members transition from state coverage to commercial coverage.
Under the HIP Workforce Bridge Account, members will receive $1,000 of support funds for up to one year during the insurance transition. The payment can cover premiums, deductible costs, copayments, and co-insurance.
However, when the account’s resources are used, the member will receive no further benefits.
An individual is eligible for HIP Workforce Bridge Account if they are fully enrolled in HIP and would be eligible if their income had stayed the same. In 2018, 27,000 individuals would have been eligible.
The HIP Workforce Bridge Account maintains budget neutrality. It draws its funding from the remaining balances of HIP $2,500 POWER Accounts, which is a savings account for HIP members. Anything not used in the account, the state retains.
The amendment also requests further exemptions from Gateway to Work for federally recognized tribes and caretakers of dependent children under 13.
“HIP has proven successful in meeting program goals since initial implementation in 2008. The State believes that the changes requested in this waiver amendment request will build on this success and further the goals of the HIP demonstration, including promoting uptake of private market and family coverage options and supporting the reduction of the coverage cliff between HIP and commercial coverage,” the amendment concludes.
“When you take a step forward in your career you should also continue to take steps to be healthy,” Indiana Governor Eric Holcomb said in a press release. “We want Hoosiers to pursue meaningful employment while continuing to see their doctor, take their medicines and maintain their overall health.”
Work requirements such as Indiana’s have been a source of contention recently. Three states’ work requirements were struck down in court by Judge James E. Boasberg. New Hampshire’s work requirements fell in court at the end of July, Arkansas’s in March of 2019, and Kentucky’s in July of 2018.
With the HIP Workforce Bridge Account and a slow increase of the hour expectations, Indiana hopes to avoid the common misstep of transitioning members out of Medicaid without a safety net.
