Work-For-Medicaid Lifts Off In Indiana, But Even Fans Fret About Red Tape

Indiana is one of the states poised to enact work requirements for some citizens with Medicaid coverage — a controversial policy and long-sought goal for Republicans. But advocates for the poor have protested loudly in recent months, saying many will lose coverage or be ensnared by bureaucratic mistakes. KHN’s Sarah Varney reports in collaboration with PBS NewsHour.

Read the full transcript:

Judy Woodruff: Republicans in Washington and around the nation are poised to achieve a long-sought goal: reshaping Medicaid. That’s medical assistance mainly for those with low incomes.

The Trump administration has given the go-ahead to Indiana and other states to require many adult Medicaid recipients to do work or community service in order to qualify.

The idea is popular in Indiana, but some exemptions will be granted for groups like caregivers, students, those in addiction recovery programs.

Still, as special correspondent Sarah Varney reports, advocates for the poor say they are worried that the requirements will jeopardize medical care for more than 30,000 people there.

This story was produced in collaboration with our partner Kaiser Health News.

Sarah Varney: Katie Josway is a songwriter and the front woman for the Indianapolis band Gypsy Moonshine. Over the past few years, she’s been covered by Medicaid. The public insurance program is largely free to patients in other states.

But, in Indiana, Josway pays about $25 a month. If she misses too many payments, the state will drop her insurance.

Katie Josway: I think that it’s fair to expect people to contribute based on their level of income and their ability to do so. So, I think that’s kind of what we do in a society. Right?

Varney: But Josway, who also works as a massage therapist, worries about changes coming to Medicaid in Indiana. And even though she earns about $16,000 a year, near the federal poverty level, she will have to prove that she’s working at least 20 hours a week to stay insured, a tough bet when her hours fluctuate each week.

Katie Josway: I’m trying to get people to book with me, but if they don’t, then I don’t want to be penalized and potentially lose my insurance as well. Like, that seems really harsh.

And I am concerned about that growing trend of assuming that anyone who is on an assistance program somehow is mooching off the government or doesn’t try hard enough.

Varney: Under former Gov. Mike Pence, now vice president, Indiana became the first state to enact a much more conservative approach to Medicaid.

But the idea of requiring most adults in the program to work was stopped by the Obama administration. Now the Trump White House is allowing Indiana to move ahead.

Seema Verma: What is going on in the Medicaid program today is that we have a very inflexible system.

Varney: The effort is being led by Seema Verma, whom President Trump appointed to lead the Centers for Medicare & Medicaid Services.

Verma once worked for Gov. Pence in Indiana, where she tested out her conservative policies, like coverage lockouts and monthly premiums. Now she’s taking her vision even further, by allowing states to impose work requirements and making smokers pay more for public insurance.

The administration has approved Kentucky and Indiana’s plans and at least eight other states have submitted similar requests. But advocates for the poor have protested loudly in recent months, saying many will lose coverage.

Nationwide, 60 percent of Medicaid recipients already work. And advocates say the ones that don’t usually have a good reason for not having a job, because they’re caregivers, students or in drug recovery.

At the heart of the debate are people like Antonio Berlanga. He’s 60 years old and lives in Clinton, Ind., and spent most of his adult life without health insurance. Indiana first expanded Medicaid coverage to a small number of poor adults in 2008, as the recession decimated the state’s economy.

Then, in 2015, Gov. Pence expanded it even further under the Affordable Care Act to about 442,000 adults. That allowed Berlanga, a janitor at a local church, to enroll in coverage. Now he’s been treated for severe shoulder pain, cirrhosis of the liver and hepatitis C at the Valley Professionals Community Health Center.

Like a lot of Hoosiers, he’s worried about what the changes could mean for him, but he’s willing to do his part.

Antonio Berlanga: Yes, I just don’t want it for nothing. If I’m still able to do something and give something back, then let’s go. I have still got a heart. I might not be able to, you know, totally do things. But I will do what I can, you know?

Varney: Dr. John Wernert, one of the architects of Indiana’s Medicaid plan, says that’s what he’s heard in every part of the state, that people on Medicaid want to feel like they’re contributing in some way.

Dr. John Wernert: It doesn’t have to be a lot of money for people to feel like they have some ownership and take some responsibility for the administration of their program.

One of the things I can say with confidence as a psychiatrist that has practiced for 30 years is, stigma is real. And there’s a great stigma that folks that are living at or near the poverty level don’t care about their health. Well, that’s completely wrong. They have just not been put in a position where they could take some ownership of that.

Varney: Revenues at Indiana’s hospitals have jumped as more Hoosiers have become insured.

The CEO of Margaret Mary Health, Tim Putnam, hired a company called ClaimAid to enroll uninsured patients into Medicaid and help them comply with Indiana’s complicated rules.

Now they will have to add the work requirements to their checklist. Putnam says the new rules aren’t designed to be punitive.

Tim Putnam: If it was purposefully trying to get people off of HIP, off of Medicaid and onto no coverage at all, that would be a detrimental program for us.

But as it is, it’s trying to get people to get work experience or get some job training to move on and transition to full employment, full insurance.

Varney: But Indiana’s conservative plan has added layers of bureaucracy that has ensnared people like Allen Wilson. He and his wife paid their monthly premium,but a paperwork glitch locked him out of coverage, to the point that his wife started to panic.

Allen Wilson: And she told them two or three times, I think you’re just trying to kill my husband, because he’s going to be too much money out of your pocket.

Varney: And you got stuck with thousands of dollars of bills.

Allen Wilson: Yes, I did. Yes, I did.

Varney: Some 25,000 Hoosiers were disenrolled from Medicaid from 2015 to 2017 because they didn’t pay their premiums. But it’s unclear why. Some may have moved out of state, found jobs with insurance, or even died.

Advocates like Alan Witchey say, now that Indiana is adding a work requirement, bureaucratic mistakes become much more common, especially for vulnerable populations like the homeless.

Alan Witchey: Even though we have been told there’s an exemption for homelessness, we haven’t heard, how is that going to work? What does that look like? How are we going to get it? What proof do you have to provide?

Varney: Those living in isolated rural areas, where jobs are few, have many of the same questions.

Niki Carty moved into her brother’s rented farmhouse here in the town of Dana after getting out of prison in 2015. She was convicted of selling meth, opioids and other drugs. Before prison, she became addicted to fentanyl prescribed by a doctor, and soon her two daughters were hooked on opioids as well.

Now the family is in recovery, and Carty is taking online classes to become an addiction counselor. But even though most students are exempt from the work requirement, Carty worries her courses won’t qualify, and she will be forced to drop out of school and get a dead-end job.

Niki Carty: I am concerned, because I got screwed once before. I really did get screwed.

Varney: In the 1990s, when Indiana forced people on welfare to work, Carty says the state didn’t recognize the classes she was taking then. She quit school and ended up getting injured on the job.

Niki Carty: I look at this way: If I had not had to go to a full-time job where I was being a full-time student then back in the ’90s, I would have never been in that factory to get hit by two forklifts. I mean, 20-some years later, I’m having this surgery, and this is pretty much the results.

Varney: State Rep. Ed Clere, a Republican from New Albany, is one of the few lawmakers raising these kinds of issues at the Statehouse.

I know one of your big concerns is creating more bureaucracy here in Indiana.

Rep. Ed Clere: Right. I think we have to be concerned about that and we need to be realistic. What it’s going to cost to administer this?

Varney: Clere says those added administrative costs will pull money away from medical care. And although he supports the work requirements in theory, he says the new rules are unlikely to improve health outcomes.

Rep. Ed Clere: And, in fact, it may over time take us in the other direction.

Varney: But many here say people who work live healthier lives and the changes will benefit the entire state.

Dr. John Wernert: We’re now starting to move the big battleship in a different direction, more towards what’s needed in our economy and what’s needed in our society now.

Varney: Back in Dana, a world away from the booming economy in Indianapolis, Niki Carty says the message from lawmakers to people like her is pretty clear.

Niki Carty: They think we’re trash, that we’re just garbage to throw away. They’re all worried about the money and all that. And I can understand that. But at the same time, there’s a lot of us that are trying to pick our lives up and put them back together.

Varney: For Carty, that means planning her weekly Narcotics Anonymous meeting with a local pastor. She’s determined, she says, to set her life straight and hopes the upcoming changes to Medicaid won’t get in her way.

For the “PBS NewsHour” and Kaiser Health News, I’m Sarah Varney in Indiana.

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