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Medicaid changes save state cash

But effects on individual recipients remain uncertain

– After about a decade of discussion, a move to simplify how Hoosiers with disabilities receive Medicaid could be in place by the spring and is set to save the state millions annually.

It’s less clear how individual citizens will be affected by the change, with some being automatically eligible for Medicaid and others possibly losing benefits.

“We’re still trying to get our arms around who will be affected and how,” said Debra Minott, secretary of the Indiana Family and Social Services Administration.

The only thing for sure is the process will be less cumbersome.

“I think it’s pretty good for everyone. It just gets rid of so much bureaucracy and duplication,” said Sen. Patricia Miller, R-Indianapolis, chairwoman of the Senate Health Committee.

She said the process saves on administrative costs for the state and is much simpler for recipients and providers.

About 1.1 million Hoosiers are currently on Medicaid – the joint federal-state health insurance program for the poor and people with disabilities. Of that number, 270,000 are considered disabled.

Indiana is a 209b state, meaning it has its own eligibility determination process for receiving Medicaid disability benefits.

It has a stricter medical definition of disability and more stringent financial eligibility requirements than what the Social Security Administration uses for supplemental Social Security income benefits.

Only a handful of states use this process. That means that after someone goes through the complicated federal disability process they have to do the same thing for Medicaid in Indiana, including another medical review panel. Sometimes the outcomes are different.

More than 30 states are called 1634 states, where anyone declared to be eligible for federal supplemental security income, or SSI, is automatically eligible for Medicaid in that state.

In Indiana, 18,000 Hoosiers are SSI-eligible but not on Medicaid, according to FSSA.

David Roos, executive director of Covering Kids & Families of Indiana, has been working to move Indiana to a 1634 state for years. He said that over time the disabled community has pushed Indiana for more aid through various waivers.

One of those avenues is a spend-down. It means that someone who is eligible medically but makes too much money is required to pay a portion of their medical bills every month before Medicaid kicks in.

About 63,000 of Indiana’s disabled Medicaid population use the spend-down program.

Minott said an amendment to the state Medicaid plan that would move Indiana to a 1634 state is being prepared.

This follows several attempts by the legislature to push the change, including mandating the move in a bill this year.

The process is going slowly, partly because no state has made the transition in 20 years, Minott said. That means no one in either the federal government or FSSA is familiar with all the details of such a move.

But she thinks the official request will be made soon, and the state should be switched over by April.

FSSA estimates there will be a net savings to the state of $23.6 million in fiscal year 2015, the first full year of implementation.

These savings mostly come from elimination of administrative costs, such as the duplicative medical review panels and appeals process. Instead, that will all be handled through Social Security.

Vi Simpson, a former state senator who pushed for the move originally about 15 or 20 years ago, said FSSA resisted in the past because of a belief it would make it too easy for people to get Medicaid.

There are people who receive SSI benefits now who don’t bother with the hassle of the Medicaid process, she said. Now they would be automatically eligible.

Roos said the state hasn’t officially received approval, but he believes the state medical review teams are slowly bringing determinations into conformance with Social Security rules.

“So when we get full status, the financial side of the equation kicks in less,” he said.

By moving to a 1634 state, the spend-down program would also be eliminated, easing the monthly tracking of prescriptions and other medical costs.

“Spend-down is a torture government imposes on someone,” Simpson said. “To keep track of every bill and figure out when Medicaid kicks in and doesn’t and try to plan when you get your drugs. Nobody knows how bad it is.”

But Minott said that without the spend-down option some Hoosiers will lose Medicaid services because they won’t meet the income requirement.

“No government wants to claim savings and throw people out with no alternative,” she said of the long delay.

Now with the Affordable Care Act, Minott said many of these Hoosiers will be eligible for health insurance subsidies through state exchanges.

And a new Medicare savings program could help those left without aid.