Medicaid changes unnerve activists Say tougher rules simply confound low-income residents

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* Advocates push health care for all amid Medicaid changes

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When Sabene Rizvi stopped recently to pick up a prescription refill for a chronic health condition, she didn't expect to face a $40 copay.

"It was quite a shock," she recalled. "It was a complete disaster for me. I had never had to pay for it before. I make $11 an hour, so that copay was half of my shift. I was completely blindsided."

Rizvi, 20, grew up in Scarsdale, New York, and moved to Fort Wayne two years ago to study political science and computer science at Purdue University Fort Wayne. She said her PFW degree will cost her a third of what her brother's same degree cost at Purdue in West Lafayette.

Rizvi said the constant shifts and changes in her Medicaid benefits - like the one that ambushed her at the pharmacy - serve only to confuse and frustrate students and other low-income individuals and families that depend on Medicaid for their health care. Rizvi said she expects to pay $300 out of pocket the next time she needs to see a doctor, a charge that would previously have been covered by Medicaid.

Health care activists who work with low-income residents say their margins for financial uncertainty are virtually nonexistent. They must constantly navigate a shifting landscape that can leave them broke, in debt, and unable to access the care they need to get healthy and stay that way.

Some question how much more change and confusion the Medicaid community can absorb after the Republican-dominated General Assembly reorganized the way Indiana's Medicaid program doles out health care access to its poorest residents by requiring healthy adults to work or volunteer at least 20 hours a week.

They say that "hoops and barriers" are recurring features of the system, designed to drive recipients - especially those with young children or medically complicated cases - out of the system and into the arms of hospital emergency departments that most agree aren't equipped to absorb them.

Some still see a chance to reinvent and rewire the state's vast bureaucratic arm with updated technology to make it better integrated and more responsive to the needs of the people it is supposed to serve.

Statewide saga

Statistically, Medicaid is a big deal in Indiana.

More than 1.83 million of Indiana's 6.92 million residents - almost one third - are enrolled in Medicaid programs in 2025. Medicaid covers 41% of all births.

About 17% of Hoosier adults ages 19 to 64, and 66% of nursing home patients are covered by Medicaid. In Allen County, 118,432 of the nearly 400,000 residents - about 30% - have health insurance through Medicaid.

When Gov. Mike Braun signed Indiana's Senate Bill 2 into law in May, he signaled an abrupt shift in the way the state provides health care for low-income Hoosiers in part to grapple with a $1 billion Medicaid budget shortfall. Republican legislators jumped at the chance to root out fraud, waste and abuse they argue is rampant in Medicaid programs.

Among other requirements, the changes require healthy adult Medicaid recipients to work or volunteer at least 20 hours per week and recertify that they're eligible every three months. While the new requirements have exceptions and exemptions, state officials are counting on the new rules to trim the Medicaid roles by 102,000 and 116,000 individuals over the next two years, though it's not yet clear how many affected Medicaid recipients are already working the required number of hours.

Still to be determined is how the vast reach and scope of the federal government will affect the newly reorganized state program.

Indiana's Medicaid saga began like those in many other states in 2020 when the pandemic effectively compelled Congress to flood the landscape with money to ease the burden and prevent the spread of COVID 19. States received funds in successive waves to sign millions of Americans up for Medicaid. Indiana did the same with the Healthy Indiana Plan, and the Medicaid roles swelled from pre-pandemic levels by 2023, when the pandemic was effectively over.

Over the next 18 months, Congress required state officials to launch what came to be known as "the unwinding," in which every Medicaid recipient in the state was required to prove that they were still eligible based on family income and other requirements. The unwinding resulted in 500,000 Indiana residents being unwound from Medicaid roles, though many were reinstated.

State officials experienced an abrupt shift of their own in 2023 when it was discovered that an accounting firm hired to estimate Medicaid costs made a $1 billion miscalculation in the estimated cost of Medicaid, leaving the state with a $1 billion hole to fill, lawmakers said. With a yawning budget deficit, they began looking around to further curb Medicaid costs.

The first budget bill filed at the beginning of the 2025 legislative session by Sen. Tyler Johnson, R-Leo, proposed capping the state's Medicaid enrollment at 500,000 people. Johnson did not return requests for comment.

That plan set off a firestorm of protest from minority Democrats, activists and recipients, who argued that a cap would effectively throw about 250,000 Hoosiers off Medicaid.

They said the plan would send sick people to overburdened and overwhelmed hospital emergency rooms all over the state - especially already-struggling rural hospitals. The cuts would also overwhelm neighborhood health clinics that currently serve 634,440 patients, many of whom are Medicaid recipients, according to the National Association of Community Health Centers.

Cooler heads eventually prevailed, and legislators switched gears to consider implementing 20-hours per week work requirements for healthy adults, the vast majority of whom - 72% - are already working at least 20 hours a week.

Legislative process

The bill that took shape in legislative committees also came with other changes:

* Instead of recertifying their eligibility once a year after the 2023-24 unwinding, recipients would be required to recertify every three months, submit the required paperwork and prove that they're working at least 20 hours a week.

* Those recipients who win $3,000 or more from the Indiana lottery would automatically lose their Medicaid benefits.

* The final bill also allows Family and Social Services Administration Secretary Mitch Roob to place caps on Medicaid enrollment if the U.S. Congress cuts the federal government's share of its contribution to pay for Medicaid.

The FSSA also stopped advertising Medicaid enrollment possibilities to potential enrollees.

Recipients, activists, medical professionals who work with Medicaid recipients and others all fear the potential effects of the changes, especially as the new regulations add more clerical responsibility to the administration's staff. New recertification requirements will add even more to the clerical load.

FSSA rules require Medicaid recipients to recertify their eligibility once a year. Some wonder if the increased cost of hiring caseworkers will wipe out or even overwhelm the savings legislators are trying to achieve.

Officials at the FSSA declined to comment on the pending changes, but issued a statement.

"We are currently developing Healthy Indiana Plan 3.0 (HIP 3.0) to ensure the program continues helping Hoosiers stay healthy and break the cycle of poverty. As part of this process, we will gather input from healthcare leaders and stakeholders across Indiana to refine the plan and ensure it provides meaningful opportunities for individuals to achieve long-term stability and financial independence. Once development is complete, we will share more details on the timeline for work requirement implementation."

Republicans who voted for the bill have long argued that new regulations will root out what they believe is long-standing waste, fraud and abuse. But activists believe that most of the fraud in Medicaid results from overcharging - most often by managed care providers - and not from patients who steal services or somehow cheat the system.

Angie Zaegel, CEO of Fort Wayne's Neighborhood Health Clinics worries that work requirements will affect Medicaid enrollment. The clinics serve nearly 7,000 patients, many of them Medicaid recipients.

"I am very concerned the work requirements will trigger an increase in uninsured individuals, and we will take several steps backwards in our efforts to focus on primary care and disease prevention," she said. "Not every employer is able to offer affordable health insurance benefits. People may not be able to afford the insurance plans under the federal marketplace especially if the (Affordable Care Act) subsidies expire."

Zaegel, who chairs the board of the Indiana Primary Health Care Association, said she's hopeful that next year's legislative session will focus heavily on health care.

"We want to be part of the solution," she said. "We want to be working together, building bridges. We community health centers are the largest safety net in the country."

Michael Wolf, chair and professor of political science at Purdue Fort Wayne, believes lawmakers didn't anticipate ballooning Medicaid roles during the pandemic, and the burden of managing the changes has fallen - by necessity - on FSSA.

"This is a huge pivot for FSSA in how they're carrying out these changes," Wolf said. "The continuous eligibility checks is a new kind of function and figuring out how to certify people who are working and volunteering is a huge component of the budget. I think they didn't think it would grow so big."

Wolf said his worst fear is a national recession that could create havoc for states that are skating close to their own budgetary borders.

"Federal pressure is on states that have to balance their budgets," Wolf said. "If we get a recession, that would be the worst thing possible. It would triple octane the whole thing."

This is not the first time that a state has attempted to impose work requirements on low-income Medicaid recipients. Georgia adopted a work requirement rule very much like Indiana's in 2023, but so far, the administrative cost of the program has far outpaced spending on medical care for the 12,000 Georgians who enrolled in Medicaid with the work rules, the Washington Post reported in May.

Ripple effect

Just a couple of weeks after the U.S. House narrowly passed a federal budget bill that would impose the same work requirements on every state in the country, many are wondering what a 20-hour per week work requirement would look like in Indiana, if the House and Senate adopt the same plan. The federal plan is estimated to effectively remove 4.8 million Americans from the Medicaid roles, according to an estimate from the non-partisan Congressional Budget Office.

The bill encountered stiff headwinds in the Senate, but work requirements are still very much on the agenda for the immediate future.

While some wonder how federal work requirements would interlock with Indiana's own work rules, the most frightening prospect for a cash-strapped state like Indiana is the potential for Congress to alter the traditional federal match formula that state and federal governments have shared.

In Indiana, the federal government pays 90% of the cost of Medicaid. Indiana draws its 10% share from state cigarette and hospital tax revenues, minimizing the cost to the state.

The prospect that federal lawmakers might cut back on the current 90% match, would force the state to reckon with its own fiscal limitations and figure out its own funding plan.

"The Congressional Republican mega-bill threatens the health care of 750,000 Hoosiers," said State Rep. Phil GiaQuinta, D-Fort Wayne. "That's almost 11% of our state's population, who rely on Medicaid's Healthy Indiana Plan for care. The Healthy Indiana Plan was made possible through an Affordable Care Act expansion, but Indiana has a trigger law on the books that will end the program should the federal government cover less than 90% of the cost of the program."

"These Hoosiers are spread across rural, suburban and urban districts and political parties," he added. "And by supporting these devastating cuts, our Republican congressional delegation is depriving their own hardworking constituents of health care coverage."

GiaQuinta said nonprofit hospitals - especially already-struggling rural hospitals - will also suffer as they try to absorb the cost of treating uninsured patients.

Will low-income Hoosiers continue to struggle to prove they belong on Medicaid or just give up in despair and hope they don't get sick?

Wolf is sympathetic to the complicated situation legislators grappled with to come up with a budget.

"In situations like these, the timing is never right," Wolf said. "The General Assembly had to act. It's really hard to craft a policy that can be political and to do so in a way that protects the recipients of the program. You have to have sympathy for them; they had to deal with a real hot potato."

Looking forward

As Sabene Rizvi's junior year ended, she is increasingly discouraged by a dismal job scene, especially for those with once-in-demand computer science degrees, like the one she's pursuing.

She said just one of PFW's 25 computer science graduates this year had a job lined up by graduation.

"So many of my friends still don't have jobs - none of them," she said. "A lot of tech companies are getting rid of their lower entry-level jobs so they can replace them with AI. I have a friend who's working part-time at Nabisco because he can't find a job. There are no jobs out there, and Medicaid is the only alternative."

"I'm afraid my generation is not going to live a long time," she said. "Every single person my age has some kind of chronic illness or disease. They're taking away from children and young children."