This overview is excerpted from Manatt on Health, Manatt’s subscription service that provides in-depth insights and analysis focused on the legal, policy and market developments.
On June 27, the D.C. District Court struck down CMS’ 2020 approval of a 10-year renewal for the Healthy Indiana Plan (HIP) 2.0 Medicaid Section 1115 demonstration (Rose v. Becerra). In addition to the atypical 10-year approval period, plaintiffs challenged CMS’ approval of the following policies for the Medicaid expansion population: premiums above the standard federal limits, eliminating coverage for non-emergency medical transportation, and eliminating retroactive eligibility for new enrollees.1
Under Section 1115, CMS may only approve demonstration that are likely to “promote the objectives” of the Medicaid program. Judge James Boasberg concluded that CMS approved HIP 2.0 without meaningfully responding to public comments asserting that the demonstration would restrict, rather than promote, access to coverage and access to care.
Notably, as in prior cases on work requirements, the court rejected Indiana’s argument that, without the challenged waivers, the state may “de-expand” Medicaid entirely, and therefore HIP 2.0 promotes access to coverage as compared to a counterfactual with no Medicaid expansion.
1 This case was put on hold because Indiana suspended premiums during the pandemic and, in early 2021, CMS advised the state that it was assessing whether the 2020 renewal complied with federal law. The plaintiffs revived their challenge, however, after CMS announced in December 2023 that it would leave the demonstration in place as approved, followed by Indiana’s announcement that it would resume charging premiums.
