This week’s review comes to us from HMA Principal Sarah Jagger, of our Indianapolis, Indiana office. Sarah provides an overview of the Healthy Indiana Plan (HIP) and the proposed changes under the HIP 2.0 waiver renewal request, submitted to the Centers for Medicare & Medicaid Services (CMS) for approval on January 31, 2017.
History of HIP
The Healthy Indiana Plan (HIP) was passed by the 2007 Indiana General Assembly with bi-partisan support. Following the Centers for Medicare and Medicaid Services (CMS) approval, HIP began enrolling uninsured adults aged 19-64 under 200% of the federal poverty level (FPL) into coverage on January 1, 2008. The original HIP program had an enrollment cap in order to manage the program within the state’s funding source (a percent of the state’s cigarette tax revenue). Following the passage of the Affordable Care Act, the 2011 Indiana General Assembly voted to codify HIP as the state’s vehicle for Medicaid expansion. In 2014, then Governor Mike Pence opted to seek expansion of Indiana’s HIP program to cover individuals in the new adult group. Funding for this expansion was secured beyond the cigarette tax revenue through an agreement with Indiana hospitals leveraging the state’s hospital assessment fee. In January 2015, CMS approved the HIP 2.0 program through a three year waiver expiring in January 2018.
On January 31, 2017, the state of Indiana submitted a waiver extension application to CMS to continue HIP for another three year period from February 1, 2018, to January 31, 2021.
In addition to the HIP 2.0 waiver modifications discussed in detail below, Indiana’s waiver application includes requests related to substance use disorder (SUD) treatment services and waiver of the long-standing CMS exclusion of services provided to Medicaid eligible adults between 21 and 64 years of age in Institutions for Mental Disease (IMDs). This overview is solely focused on the proposed modifications to HIP 2.0 and does not summarize the SUD waiver requests made by the state.
The HIP 2.0 Waiver Model
The Healthy Indiana Plan (HIP) is a consumer-driven health plan for Medicaid beneficiaries. HIP offers low-income, non-disabled adults a high deductible health plan paired with a Personal Wellness and Responsibility (POWER) account, which is modeled on health savings accounts. The POWER account, valued at $2,500, contains contributions made by the State and the member. Member contributions equal two percent (2%) of income, but no less than $1.00 per month and no more than $100.00 per month. Contributions are intended to give participants “skin in the game” and incentivize individuals to become engaged in their healthcare and adopt healthy behaviors.
Consistent with commercial market practices, applicants are required to make their first month’s POWER account contribution prior to the start of benefits. Benefits begin the first day of the month in which the contribution was received. In order to expedite coverage, applicants are provided the opportunity to pay a ten dollar ($10.00) fast track POWER account prepayment, while their eligibility application is being processed. This prepayment accelerates enrollment into the program.
HIP offers members three benefit packages – HIP Plus, HIP Basic, and HIP Employer Link. The HIP Plus plan includes enhanced benefits, vision and dental, to create an incentive for members to make regular monthly contributions to their POWER account. The only other cost-sharing for HIP Plus members are copayments for non-emergency use of hospital emergency departments (ED). The first non-emergent use of the ED requires an $8.00 copayment with a $25.00 copayment for each subsequent non-emergent ED visit. Members at or below the FPL are transferred to HIP Basic if they do not make their POWER account contributions. When HIP members over 100% FPL fail to make their monthly POWER account contribution for two consecutive months, they are terminated from HIP, consistent with commercial market policies. These members cannot reenroll for six months. Individuals determined medically frail[1] do not lose benefits due to non-payment of POWER account contributions. In addition to not covering the enhanced benefits available through HIP Plus, the HIP Basic plan applies copayments to all healthcare services.
Every HIP member is provided a POWER account regardless of their benefit plan. The POWER account contributions create a direct financial investment for members in their healthcare and is designed to incentivize members to manage their accounts and utilize free preventive services. The first $2,500 in annual health care expenses are covered by the POWER account, additional expenses are fully covered by the state at no additional cost to the member. HIP members own their POWER account contributions and are entitled to a portion of unused contributions when they leave the program. Members who obtain preventive services are eligible to reduce their future POWER account contributions.
Individuals enrolled in HIP Employer Link receive the benefits provided through their employer sponsored health insurance (ESI) through the provision of a $4,000 HIP Link POWER account. The account reimburses enrollees for the costs associated with the ESI plan, including premium costs that are in excess of the required monthly POWER account contribution and other out of pocket cost sharing.
Further innovations that promote consumerism and personal responsibility that implemented in the first year of HIP 2.0 include the rollout of debit cards that allow members to make payments to providers directly from their POWER account at the point of service. In addition, members also have the ability to pay POWER account contributions to all the managed care entities at no additional charge at Wal-Mart locations.
Requested HIP Program Modifications
The HIP program has been successful in achieving its goal of reducing the number of uninsured, low income Hoosiers. Indiana reports that 60 percent of members who enrolled in HIP 2.0 were previously uninsured. As of December 1, 2016 HIP enrollment was over 394,000 individuals which exceeds the state’s projected enrollment of 391,886 in the first year. The state’s waiver renewal seeks to continue the current HIP model and incorporate the following program modifications that will further promote personal responsibility in a fiscally responsible manner:
- Expand incentives program
- Require tobacco-user premium surcharge
- Add new HIP Plus incentive
- Reestablish an open enrollment period
- Facilitate enrollment in HIP Maternity coverage for pregnant women
- Technical revisions and updates to 2015 Special Terms and Conditions
Healthy Incentive Initiative. To increase HIP member participation in Medicaid managed care incentive programs that primarily target preventive care and chronic disease management, the state will align member incentives with specific health challenges facing HIP members. These include: tobacco cessation, substance use disorder treatment, chronic disease management, and employment related incentives. The program will be designed to offer outcomes-based incentives to members who meet individually achievable relative goals, as well as some process and participation measures. To more closely align with the private sector, the state seeks to significantly increase available incentives to a maximum of $200 per initiative, with a total of no more than $300 per member per year. The state’s managed care contracts and provider incentives will be revised to align with the member health focus areas.
Tobacco-User Premium Surcharge. To improve tobacco cessation service utilization, Indiana Medicaid recently enhanced its benefit package removing restrictive reimbursement requirements for these services. To build upon those efforts, the waiver renewal seeks to increase member utilization of tobacco cessation services by, among other things, discouraging tobacco use through a premium surcharge for HIP Plus members. Similarly, the private market leverages higher premiums on tobacco users. Under this surcharge in HIP, POWER account contributions will increase for tobacco users in accordance with the allowable Affordable Care Act rating rules which allow qualified health plans to charge up to 1.5 times the non-smoker rate. Members who are known tobacco users will be required to pay monthly contributions equal to three percent (3%) of income in their second year of eligibility. The surcharge will be waived for the first year of enrollment to allow individuals the opportunity to take advantage of tobacco cessation benefits offered through HIP.
HIP Plus Incentive. The state seeks to add chiropractic benefits (one (1) visit per day and six visits per covered person per benefit year) to the HIP Plus plan. The intent being that this additional benefit will enhance the value proposition of making timely POWER account contributions and participating in HIP Plus.
Reestablish HIP Open Enrollment (Six Month Waiting Period). The original HIP program included a 12-month open enrollment period or lock-out period. Under this policy, HIP members who failed to comply with the redetermination process were not permitted to re-enroll in HIP for 12-months. In 2016, the Indiana General Assembly lowered the open enrollment period to six (6) months. Under the waiver renewal, the state seeks to require members who lose eligibility due to failure to comply with the redetermination process to wait six (6) months until they are permitted to re-enroll in HIP coverage. This policy would not apply to members who are medically frail, pregnant, low-income parents and caretakers, or low-income 19 and 20 year old dependents. Individuals who experience one of the legislated “change in circumstances”[2] and were prevented from competing the redetermination process would be exempt from the waiting period and permitted to re-enroll at any time.
HIP Maternity Coverage. HIP members who become pregnant may choose to remain enrolled in HIP, or may transfer to the Hoosier Healthwise program.[3] Women who choose to remain in HIP are required to transfer from HIP to Hoosier Healthwise if they remain pregnant during their annual redetermination period. HIP maternity coverage is equal to the coverage provided under Hoosier Healthwise as required by federal law. Finally, women who are pregnant at the time of Medicaid application are enrolled in Hoosier Healthwise and then transitioned to HIP following the post-partum coverage period. To alleviate the administrative burden created by these required program transfers, the waiver renewal seeks to modify eligibility criteria to require enrollment in HIP for pregnant women with income under 138 percent FPL.
In addition to the above policy changes, the state seeks the following technical revisions and updates to the STCs:
Prior Claims Payment Program. The prior claims payment program provides retroactive coverage for medical services received during the 90-day period prior to the new member’s HIP enrollment. The current STCs require this program for Section 1931 parents and caretakers who have not received Medicaid coverage within two (2) years of enrollment and who did not gain HIP coverage through presumptive eligibility. The waiver renewal requests that CMS remove the prior claims payment program for the waiver extension period citing low utilization as the reason for no longer requiring it.
Copayments for Non-Emergent Use of Hospital Emergency Department. As previously noted, the HIP waiver includes graduated copayments for non-emergent use of the ED. The waiver renewal seeks to renew the cost sharing waiver beyond the initial two-year waiver period.
Non-Emergency Medical Transportation (NEMT). Indiana has operated HIP with a NEMT waiver for a number of years. HIP 2.0 granted a one-year waiver of this policy to evaluate it. The state reports that the initial evaluation found that state-provided NEMT benefits do not lead to improve member access to healthcare services for HIP members. As such, the state renews its request for a waiver of NEMT for the HIP waiver extension period. This request would not waive NEMT for the HIP populations[4] that are exempt from the alternative benefit plan and receive Medicaid State Plan services.
Hepatitis C Drug Coverage. The waiver renewal seeks to incorporate the state’s policy, which was made effective September 1, 2016, carving all covered hepatitis C drugs out of managed care.
Plan Changes and Member Transitions. At the time of application, HIP members select a managed care entity (MCE) and can change their selection any time prior to making their initial POWER account contribution. HIP members thereafter may change their health plan annually during redetermination or anytime during the benefit period “for cause.” Despite limited availability for transitioning between plans, the state indicates that members often leave and return to the program within a 12-month period. When this transition occurs, often the member changes health plans and therefore must be provided a new POWER account. To minimize these disruptions, the state seeks to have member plan choice locked in for a 12-month period; with the exception of “just cause” transitions. Member POWER accounts would also be reinstated rather than receiving a new account. Finally, the state proposes to immediately enroll members moving into HIP from another Medicaid category or between HIP coverage types into the HIP Basic plan and allowing a 60-day window to make the initial POWER account contribution and move to HIP Plus.
Requested Expansion of HIP Employer Link
HIP Employer Link allows HIP eligible individuals who have access to qualifying ESI to enroll in the employer’s health insurance instead of HIP through premium assistance. HIP Employer Link is not available to members eligible for other Medicaid programs in Indiana. For example, children under age 19 are not eligible for HIP Employer Link premium assistance. The state seeks authority to extend the HIP Employer Link coverage option to all Medicaid eligible family members (excluding those individuals with limited benefit packages or Medicare dual eligibles) of HIP Employer Link enrollees provided the family coverage is affordable. The current HIP Link program does not exclude high deductible health plans provided the plan passes the HIP Link affordability assessment. The waiver renewal requests that this same policy be extended when assessing coverage for family members of HIP Link enrollees.
[1] Individuals with certain physical, mental and behavioral health conditions.
[2] 405 Ind. Admin. Code 10-10-13(e) (2016).
[3] Indiana’s traditional Medicaid managed care program for children and pregnant women.
[4] Pregnant women, individuals determined to be medically frail, Section 1931 parents and caretaker relatives, and individuals eligible for transitional medical assistance.