Personal Responsibility in Medicaid: Evidence from the Healthy Indiana Plan

In February 2015, Indiana became the 29^th state to expand Medicaid; since then Alaska, Montana and Louisiana have followed suit. Indiana joined a handful of states that expanded coverage under a waiver that allowed the state to customize several features of the program. Indiana’s program is of particular interest because it has more stringent requirements for monthly contributions from beneficiaries than in other states. As more states consider Medicaid expansions through 1115 waivers, there is greater interest in understanding consequences of Indiana’s experience with the Healthy Indiana Plan (HIP 2.0). Using national as well as Indiana-specific data, this paper uses standard difference-in difference methods to examine health insurance coverage, health care and health outcomes.

The primary study method compares outcomes among targeted socio-demographic groups in Indiana, compared to a set of states that did not expand in 2015. However, since 2014 expansion states were still experiencing growth of enrollment in 2015, we limit our control group to never-expansion states. We use DD models that alternatively feature neighboring non expansion states, all non expansion states nationally, as well as synthetic control methods of Abadie, Diamond and Hainmueller (2010) for situations of one treated state compared to multiple control states. Within Indiana, we examine outcomes in counties with low vs high baseline uninsurance rates. Where appropriate, we also compare outcomes among 19-64 yr olds to other relatively less affected age groups. We also compare results in Indiana to states that carried out more traditional Medicaid expansions to understand the impact of Indiana’s personal responsibility features.

The outcomes analyzed include enrollment data from the state and from CMS, insurance coverage (American Community Survey: state level and PUMA level analysis, data through 2016), health insurance access (Behavioral Risk Factor Surveillance System: state level, data through 2016), prescription drugs (state by class level, through 2017, administrative totals for all states), early prenatal care (Natality data: state and county level, through 2015), and hospitalization outcomes (detailed data for certain reasons for visit, from Indiana, through 2017).

The results from these population-level analyses serve as a complement to evaluation reports by the state government and by CMS, and will help broaden the knowledge base regarding the impacts of the Healthy Indiana Plan and personal responsibility in Medicaid.