Fifteen years after Obamacare’s passage, Indiana may finally fix that broken law’s signature policy. Lawmakers are moving to repeal and replace the state’s Medicaid expansion, transforming it into a more sustainable program that moves hundreds of thousands of able-bodied adults from welfare to work. Indiana’s reform should inspire other states, to say nothing of leaders in Washington.
By moving to pass this legislation, Indiana is responding to a perfect storm of fiscal crisis and legal chaos. The state’s Medicaid program has been in dire financial straits, with a $1 billion shortfall last year that forced the state to create waiting lists for families with long-term disabilities. Also last year, a federal judge struck down Indiana’s waiver for Medicaid expansion. Issued by the Obama administration in 2015, the waiver allowed Indiana to enact modest reforms such as requiring premiums for expansion enrollees.
While that ruling was dubious, it nonetheless forced Indiana to act. The easy road would be to pursue traditional Medicaid expansion, like the other 40-plus states that have embraced that budget-busting policy. Yet that would put further pressure on state finances, ensuring more cuts for vulnerable patients. It would also do nothing to move people toward work, which matters because more than half of the 500,000 able-bodied Hoosiers covered by Medicaid expansion aren’t working at all.
Instead of accepting further fiscal and economic pain, Republican lawmakers and newly elected Gov. Mike Braun (R-IN) want to protect the people who need Medicaid by helping those who don’t need it move into the workforce.
The bill that Senate leaders introduced in January would fix Medicaid expansion in two steps. The first is simple: Repeal Medicaid expansion. Practically, Indiana would remove the expansion population, who are all able-bodied adults, from the existing state plan. Then comes the second step: Create a new program that puts them on a path to work while following the recent court ruling.
Under this second step, Indiana would apply for a new Medicaid expansion waiver from the federal government. Such a waiver would allow the state to cover able-bodied adults who meet a modest requirement to work, train, or volunteer at least 20 hours per week — the same as what’s required for food stamp eligibility. Anyone who can’t meet this requirement, such as those physically unable to work or those enrolled in a substance abuse program, would be excused.
These reforms would quickly move Hoosiers who can work and who would profoundly benefit from working into an economy that desperately needs workers. As they leave Medicaid, the state would save significant sums that could be routed toward caring for truly needy people on the waitlist. Simultaneously, and separate from the waiver, Indiana’s reform would crack down on Medicaid fraud and abuse. More than 1 in 4 dollars spent on Medicaid in the state are wasted, primarily due to ineligible people on the program. Rooting out this waste would also ensure more resources for those who really need it.
Crucially, this reform repeal wouldn’t go into effect until Indiana secures approval for its new waiver — a process that could take up to a year and is likely to succeed in the Trump administration. During that time, no one would have their coverage dropped, giving Hoosiers extra time to prepare for the coming work requirement.
Naysayers claim this reform would suffer another defeat in the federal courts. But lawmakers have gone to great lengths to ensure that a new waiver follows existing legal opinions. They can also point to formal guidance from the Obama administration that’s still in effect, explicitly empowering states to repeal their Medicaid expansion. To clear up any doubt, and to prevent a future administration from revoking a waiver, President Donald Trump and Republicans in Congress should include language in their coming reconciliation bill to add work requirements to Medicaid and give states more flexibility.
TRUMP STRENGTHENS HIS OWN MEDICAL TRANSPARENCY RULES AFTER ENFORCEMENT WANED UNDER BIDEN
But Indiana doesn’t need to wait for Washington to act. If it passes this reform in the coming weeks, which looks likely, the Hoosier State will set a national model. Hundreds of thousands of able-bodied adults will benefit because they’ll move from dependency to self-sufficiency. They’ll free up hundreds of millions of dollars that are needed to pay for benefits for the vulnerable, especially children with disabilities.
Best of all, Indiana will show the way forward for every state that has expanded Medicaid. No state should have taken this path, to begin with, and now they’re all on the same track as the Hoosier State — throwing more money at more able-bodied adults, year after year, while the truly needy get pushed further back in line. Obamacare’s signature policy made that inevitable, but Indiana can show that states can do better.
Jonathan Bechtle is chief operating officer of the Foundation for Government Accountability.
This article was originally published at www.washingtonexaminer.com
Author
