HIP Lawsuit Explainer-Rose v. Becerra

Judge Rules In Favor of Plaintiffs in HIP Lawsuit.

In June 2024, the U.S. District Court for the District of Columbia issued an opinion finding that the federal approval of features in Indiana’s HIP program was inadequate. Read the opinion here. The court ordered the federal government to redo the approval process, ensuring that any features approved promote the objectives of the Medicaid Act—specifically furnishing health coverage. In the meantime, the court’s opinion should prevent Indiana from reinstating the POWER Account contributions (which have a demonstrated history of causing individuals to lose health coverage).

What is this case about?

In September 2019, several individuals filed a lawsuit against the federal government challenging its 2018 approval of the Healthy Indiana Plan, which allowed Indiana to implement a number of policies that restrict access to coverage and services. These policies included the introduction of work requirements and continuation of other restrictions: POWER Accounts Contributions (premiums), the lack of 3-months retroactive coverage, and a waiver of non-emergency medical transportation. The case is Rose v. Becerra.

Read the current complaint here, (amended on January 31, 2024).

What has happened since the case was originally filed?

The lawsuit was paused during the COVID-19 public health emergency. Shortly after the pandemic began, in 2020, Indiana voluntarily paused all POWER Account Contribution requirements, and has not reinstated them since.

In June 2021, the federal government permanently removed work requirements from the program and indicated they would review the remaining features (including the POWER Account Contributions) to decide if they should be removed. Although the public health emergency ended, the lawsuit remained on pause until the federal government completed the review. In a December 2023 letter, the federal government announced that the review was complete.

What did the December 2023 letter say?

In the December 2023 letter, the federal government indicated that despite well-documented concerns about premiums, based on accumulated research from a number of states (including Indiana), it would not remove them from the program because doing so could be disruptive for the state during the current Medicaid unwinding. CMS reached this conclusion even though Indiana had not implemented POWER Account Contributions in nearly four years and knowing that re-introducing them will cause coverage losses to HIP members.

What is happening in the case right now?

The plaintiffs are asking the judge to vacate the federal approval allowing Indiana to require premiums, eliminate retroactive coverage, and eliminate coverage of transportation to and from Medicaid covered services.

Additional Information about HIP and POWER Account Contributions:

What do evaluations say about POWER Account Contributions?

· POWER Account Contributions cause people to lose health coverage. A 2017 assessment found 46,000 Hoosiers never received HIP for failure to make their first POWER Account Contribution. 

· POWER Account Contributions are especially harmful to Black HIP members. A 2020 Evaluation found Black HIP members have a higher likelihood of receiving inferior coverage or losing coverage altogether due to POWER Account Contributions. 

· POWER Account Contributions do not lead to “consumer driven” choices. A 2020 Federal Evaluation showed that despite education efforts over several years, most HIP members have a low understanding of what POWER Accounts are and how they work—meaning the contributions they make do not lead to “consumer driven” decision-making on health care. This same report explains how POWER Account Contributions and other cost-sharing features are expensive and complex for the State to administer.

Are POWER Account Contributions necessary to run HIP?

No. Indiana has not collected POWER Account Contributions for the past four years, without any disruption to operations. Other states operate their Medicaid programs without similar premiums. This demonstrates POWER Account Contributions are not essential to Indiana’s program. Bringing them back will cause significant coverage losses, disruption in coverage, and increased administrative costs.

A 2022 evaluation found that HIP is cheaper to administer without administrative features like POWER Account Contributions. Highlights from evaluation here. (Full evaluation here).

How does this relate to Indiana's current Medicaid budget crisis?

These are totally separate issues. The current budget crisis relates to the cost of vital services for medically complex children and disabled/elderly adults received through different Medicaid programs. (Related, IJP filed public comments drawing concerns with the state’s plan to alter the waiver programs these families rely on). In Indiana, HIP covers, among other groups (like pregnant individuals), the “Medicaid Expansion Population.” For this group, the federal government pays almost the entire cost--90%. The state's share of HIP is paid out of a dedicated fund of hospital assessment fees, meaning that general state revenues from taxpayers are not used.

HIP can be a lifeline for the caretakers of medically complex children, enabling them to stay healthy as they help provide the 24/7 care their children need to stay at home and avoid more costly care. A national profile indicates that a significant portion of these caretakers are income-qualified for HIP. Additionally, caregivers have a higher prevalence of mental health needs, which can be met by HIP. Re-introducing Power Account Contributions will only make it that much more difficult for caregivers to focus on the needs of their medically complex children and loved ones.