On June 28, 2012, the United States Supreme Court issued its ruling in National Federation of Independent Business vs. Sebelius, the landmark case that challenged the constitutionality of the Patient Protection and Affordable Care Act, known as Obamacare (“ACA”). While the Court upheld the constitutionality of most of the ACA, the Court was fragmented on many of the issues. Perhaps the most complex portion of the Court’s decision concerned the ACA’s Medicaid expansion. Although complex, the ruling’s practical effect makes the ACA’s Medicaid expansion optional for states.
Indiana’s eligibility rules for traditional Medicaid were among the most stringent in the country, and Indiana was initially reluctant to expand Medicaid. After much discussion with the Obama administration, however, Indiana submitted its final waiver proposal in the summer of 2014. Although the proposal was not agreed to by the federal government, the parties continued to negotiate and on January 27, 2015, the Centers for Medicare & Medicaid Services (“CMS”) approved Indiana’s waiver to implement Medicaid expansion. Beginning February 1, 2015, Indiana’s program, known as Healthy Indiana Plan 2.0, will cover 350,000 beneficiaries, including adults ages 19-64 with annual incomes under 138 percent of the federal poverty level (“FPL”) (about $16,242 per year for an individual in 2015).
While some elements of Indiana’s waiver are similar to those approved in other states, several of its provisions are distinct and have not been approved in other Medicaid expansion programs. For example, CMS approved Indiana’s graduated copayments for repeated non-emergency use of the emergency room. The $25 maximum amount is the highest such copayment approved by CMS to date. CMS also agreed to require most newly eligible adults with incomes from 0-138% FPL to pay monthly premiums by contributing to a health savings account. In a major concession, CMS agreed to allow beneficiaries with incomes above 100% FPL who fail to make the required premium payment following a 60-day grace period to be “locked out” of the program for a period of 6 months (CMS had previously denied Pennsylvania’s lock-out request). Finally, CMS agreed to Indiana’s waivers of reasonable promptness and retroactive coverage, making coverage effective on the date of the initial premium payment rather than on the date of application.
While CMS’s approval of these elements can be considered groundbreaking, CMS did not approve all of Indiana’s requested amendments. Indiana requested waiver of Early Periodic Screening Diagnostic and Treatment (EPSDT) benefits for 19 and 20 year olds in the Healthy Indiana Basic Plan and this request was denied. CMS also denied Indiana’s request to require all beneficiaries to work in order to receive benefits.
Indiana was the 28th state to expand Medicaid through the ACA, and its expansion is arguably the most conservative to date. Approval of Indiana’s groundbreaking and flexible waiver may persuade even those reluctant states to jump into the Medicaid expansion waters.
This article was written by Kelly J. Jackson, an attorney with Jackson Kelly PLLC. This article is intended solely as an information source and its contents should not be construed as legal advice. Readers should not act upon the information presented without professional counsel.