FSSA halts POWER Account contributions after federal ruling

Premiums are returning for certain Medicaid enrollees, a cause for concern for some anti-poverty advocates. (Getty Images)

The Family and Social Services Administration (FSSA) will stop enforcing collections of premium-like payments — the agency announced Monday, the same day it was set to restart the program . The action comes after a Thursday ruling from a federal judge striking contributions to POWER Accounts for Indiana’s Medicaid expansion enrollees.

“The implications of the decision handed down are far reaching. FSSA is still evaluating the impact for the state and the 762,000 Hoosiers who rely on health care coverage through our Healthy Indiana Plan,” said Cora Steinmetz, the state’s Medicaid director, on Monday at a press conference.

The Healthy Indiana Plan, otherwise known as HIP 2.0, provides coverage for non-disabled, moderate-income adults between the ages of 19 and 64 and was first introduced in 2007 under the Daniels administration — with the federal government covering 90% of costs for enrollees.

However, the federal government granted the state a special waiver to require a monthly, variable POWER Account contribution that reportedly confused many enrollees and disproportionately caused Black Hoosiers to lose access to the life-saving coverage.

The judge ruled that federal regulators erred when they granted the state authority to charge the contributions, alongside state rules regarding retroactive coverage and non-emergency medical transports.

Advocacy groups applauded the ruling, which community organization group Hoosier Action called a burdensome barrier to care. Hoosier Action coordinated hundreds of public comments and testimonies cited in the judge’s ruling.

“I’m overjoyed,” said Hoosier Action leader and HIP member Mulugeta Wolfe. “I just got back on HIP and paying my POWER Account payment on time was one of the things I was concerned about. It’s not even making the payment amount that’s hard, it’s remembering.

“HIP is important to me as someone working part time here and part time there and going to school and HIP gives me that flexibility as a younger person to do the things I want to do with my life.”

HIP members will still have coverage, Steinmetz said, and the state will be pursuing “all” legal remedies in consultation with state and federal attorneys. The ruling doesn’t impact the premiums charged for disabled Hoosiers using MedWorks or minors relying on the Children’s Health Insurance Plan.

“Indiana disagrees with the ruling and believes these actions have unintended consequences for our program … (and) the agency will provide additional updates as appropriate,” Steinmetz concluded.

Impact of the ruling

Chief Judge James E. Boasberg, of the U.S. District Court for the District of Columbia, included some of the submitted comments in his final ruling, observing the “rather earthy language” and pleas to halt the program.

“(I’ve) seen 1st hand the many harms the power account has done to those who are trying to both link to and retain health care as well as ensure medication compliance and hold a job. Get rid of the (expletive) power account,” one HIP user wrote.

Boasberg cited submitted evidence that found 60,000 Hoosiers, or 29% of those subject to premiums, were disenrolled due to nonpayment — whether it was failing to make the first payment or not making a later payment and getting their coverage reduced. Over half of all beneficiaries missed at least one payment during 2015 to 2016, he said.

In our law school clinic, we see Hoosiers every day who have to make horrible choices between paying rent, putting food on the table, and other bills.

Judge Boasberg recognized that they and tens of thousands of Hoosiers like them were likely to lose their healthcare under the previous rules for the Healthy Indiana Program.

– Fran Quigley, a law professor and legal clinic director at Indiana University

Steinmetz repeated an argument on Monday that failed to sway Boasberg, namely that state law requires FSSA to administer the POWER Accounts program.

“… while HIP members remain covered today for Medicaid, the ruling creates uncertainty regarding which services are covered and removes authority for certain administrative aspects of the program’s operation,” Steinmetz continued. “The ruling also has implications that conflict with Indiana state law.”

Imposing POWER Accounts stems from Senate Enrolled Act 165 passed in 2016. The wide-ranging bill addresses an assortment of directives for FSSA, including POWER Accounts, and strips authority from FSSA’s secretary to make changes to the program, unless it is “required by federal law or regulation.”

Adam Mueller, part of the team of attorneys for the plaintiffs suing HIP, likened the exception to an “escape hatch.”

“My interpretation of the ruling is that the POWER Account contribution requirement is going to be on hold. It has been on hold for four years,” said Mueller, with the Indiana Justice Project. “It appears that … people will not lose coverage or have downgraded coverage based on POWER Account payments.”

The state paused POWER Account contributions during the COVID-19 pandemic and the managed care entities overseeing such coverage haven’t collected those payments since 2020. Previously, someone within a certain income bracket who failed to pay would be moved to a lower tier health plan while others would have a “lockout” period spanning several months.

The managed care entities will bear the responsibility of communicating with members, so Steinmetz couldn’t specify how enrollees would be notified of the change.

The ruling alone doesn’t threaten the entire HIP program because that approval is part of the state’s amended Medicaid plan while the POWER Account contributions fell under a separately approved waiver, Mueller noted.

But attorneys arguing for the state in the case disagreed.

FSSA didn’t respond to a question about whether Dan Rusyniak, the secretary for FSSA, had used his power from the law to strike the rule.

Reaction to the ruling

Hoosier Action, the entity that organized HIP enrollees to submit comments to the federal judge, updated a Friday comment with addition context from Fran Quigley, a law professor at Indiana University and the d irector of the law school’s Health and Human Rights Clinic.

“In our law school clinic, we see Hoosiers every day who have to make horrible choices between paying rent, putting food on the table, and other bills. Judge Boasberg recognized that they and tens of thousands of Hoosiers like them were likely to lose their healthcare under the previous rules for the Healthy Indiana Program,” Quigley shared.

“On behalf of our clients and those Hoosiers across the state, not to mention the broader state economy and healthcare system, we are deeply grateful for this ruling and the advocacy of the Indiana Justice Project, Hoosier Action, and the National Health Law Program. This ruling and their advocacy saved lives, and vastly improved the HIP program.”

Rep. Ed Clere, a Republican representing New Albany, has repeatedly voiced concerns about the state’s administration of the HIP program, including the lack of retroactive eligibility available in other Medicaid programs.

A four-year pause could have shown how necessary and vital POWER Accounts were to the operation of HIP, he said, especially in light of extra scrutiny of the Medicaid budget following a nearly $1 billion shortfall, but fell short.

“The pandemic provided an opportunity to demonstrate that POWER Accounts don’t add anything — other than confusion, administrative expense and disenrollment,” said Clere, who chairs the Health and Medicaid subcommittee for the state’s Ways and Means Committee.

“There has never been any evidence that POWER Accounts or any of the other financial contribution requirements improve outcomes … we should be willing to step back and look at ways to tweak the design of HIP 2.0 in a way that eliminates this unnecessary administrative expense and look for new opportunities.”

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Mueller, the attorney and advocate, also saw the ruling as a chance to improve the Medicaid program. The 66-page ruling — which includes a reference to pop icon Taylor Swift — made it clear to Mueller that Boasberg “really under(stood) this program.”

“… the judge took an opportunity to really listen to what people thought and what people said in the administrative record. To me, that is really heartening,” Mueller said. “The judge has sort of given the (federal regulators) and Indiana an opportunity to make HIP work in accordance with Medicaid law. And that could be a lot of things. You know Hoosiers — we pride ourselves on being innovative.”

An area where Medicaid could potentially fill a need, Mueller said, are Hoosiers exiting Indiana’s prison system, who aren’t currently auto-enrolled in contrast to other states. Another area to explore could be housing assistance.

“There’s an opportunity here to see a post-pandemic future (where) this program could be really, really great,” Mueller concluded. “I hope that’s an opportunity that the state seizes in partnership with the (federal regulators).”

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