By Maureen Groppe

WASHINGTON, D.C.—Indiana expects to receive soon federal approval to phase in a new requirement that some Medicaid recipients work, Indiana Family and Social Services Administration Secretary Jennifer Walthall said Thursday after the Trump administration issued guidance for states on the new rules they will allow.

“Medicaid needs to be more flexible so that states can best address the needs of this population,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services who previously helped create Indiana’s Medicaid program. Verma said she issued the guidance in response to requests from states wanting to “improve their programs and to help people in achieving greater well-being and self-sufficiency.”

Advocates for the poor, however, said Verma’s decision will likely be taken to court. The liberal Families USA said Thursday it’s working with the National Health Law Program and other groups on a challenge.

“Many lives are at stake if today’s CMS decision stands,” said Eliot Fishman, senior director of health policy of Families USA. “We will be working to ensure that it does not.”

Indiana is among 10 states with requests pending.

Walthall said the guidance from CMS supports Indiana’s plan to connect Medicaid recipients “to more meaningful community engagement.”

“Whether it is a job, training, volunteering, substance abuse treatment, additional education or another opportunity, becoming an active and productive member of the community is an important part of healthy living,” Walthall said.

Indiana’s work requirement would be phased in for those enrolled in the Healthy Indiana Program (HIP 2.0), the state’s alternative Medicaid program. The requirement would not apply to some participants, including pregnant women, those being treated for substance abuse, “the medically frail” and those older than 60.

The state estimates about 30 percent of current recipients would have to comply. If they’re not already working at least 20 hours a week or going to school, recipients would be required to participate in the Gateway to Work program. That program was created for the Healthy Indiana Program to connect unemployed recipients with job openings and with work search and job training programs. But participation has been low.

Those who don’t comply would be suspended from receiving health care benefits until they meet their required hours for a month. The state estimates about one-fourth — or about 33,000 — of those referred to Gateway to Work will choose not to participate.

Indiana’s proposal was included in its request to continue HIP 2.0, which has been operating under a waiver of some federal rules. 

Walthall said she expects CMS to give Indiana full approval of its application, which would allow HIP to continue for another three years.

Health groups and advocates for the poor — including the National Center for Law and Economic Justice and the American Lung Association — dispute Verma’s contention that the Centers Medicare and Medicaid Service has the authority to grant such requests.

Courts have said states can’t add additional requirements for Medicaid eligibility that are not in law, a coalition of groups wrote in its comments on Indiana’s request. (GOP lawmakers wanted to change the law as part of a repeal of Obamacare, but the efforts failed.)

“Most people on Medicaid who can work, do so,” the coalition wrote, “and for people who face major obstacles to employment, harsh requirements won’t help them overcome them.”

The state argued in the application submitted by Gov. Eric Holcomb that increasing participation in the state’s Gateway to Work program will encourage Medicaid recipients to be self-sufficient and help them transition to getting their insurance through an employer.  

“The state believes this will lead to improved overall health for members, as the correlation between employment and better physical and mental health has been documented, as well as a better-trained workforce,” officials told the federal government.

Indiana estimates the requirement would cost $90 a month per enrollee to administer. The Center for Law and Social Policy says that would be both a shift of resources away from needed health care while still not being enough for anything “but an ineffective, low-touch job search program that primarily serves as an additional hoop for beneficiaries to jump through.”

“The state has little evidence for why the current Gateway to Work program would fare better if mandatory,” wrote Jon Laramore, executive director of Indiana Legal Services.

Contact Maureen Groppe at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.