Consumerism in Medicaid? Coverage and Access Changes In the Healthy Indiana Program vs. Traditional Medicaid Expansion

Under the Affordable Care Act (ACA), 31 states plus the District of Columbia have opted to expand coverage to low-income adults with incomes under 138%. The majority of these states are doing so via a traditional Medicaid expansion, but several have used Section 1115 waivers to design alternative approaches to coverage expansion. In this study, we assess the experiences of low-income adults in a state with unique program features – the Healthy Indiana Program – and compare their experiences with those in other Midwestern states.

The Healthy Indiana Program was designed by now-administrator of CMS Seema Verma and Vice President Mike Pence (former governor of Indiana). It created health savings accounts (called “POWER accounts”) and required premium contributions, with the stated goals of increasing price-based consumerism among Medicaid beneficiaries, enhancing self-sufficiency, and eventually facilitating a transition into commercial health insurance. To date, there has been no systematic evaluation of this program that compares it to more traditional Medicaid expansions.

Our approach combines two national household surveys – the American Community Survey (ACS) and the Behavioral Risk Factor Surveillance System (BRFSS) from 2010-2016 – and a novel random-digit dialing telephone survey of 3000 low-income adults. We use the government survey data to conduct a difference-in-differences analysis comparing Indiana and other Midwestern states implementing Medicaid expansions, with non-expansion states as the control group. Then we test for significant differences in expansion effects on coverage and access to care in the Healthy Indiana program vs. other expansion states. Lastly, we present preliminary results from our survey of low-income adults in Indiana documenting their experiences and understanding of the Healthy Indiana program (this aspect of the study is still in process, with data collection to be completed by mid-December).

Our primary findings are threefold. First, Indiana’s expansion – despite the requirement for some beneficiaries to pay premiums for coverage with the threat of disenrollment for non-payment, produced similar overall coverage gains by 2016 as other Midwestern states’ Medicaid expansions. Second, Indiana’s low-income population experienced modest improvements in the ability to afford needed care and to obtain a preventive health visit, which again were similar in magnitude to those changes occurring in other expansion states. Finally, in preliminary results from our survey focusing directly on the novel features in the Healthy Indiana Program, we find that the majority of beneficiaries did not understand the program’s details or make regular contributions to their POWER accounts, while a smaller share reported that the program helped increase their attention to which health care services they really needed.