Elkhart County builds roughly 80% of recreational vehicles sold in America. When the RV market is strong, unemployment drops below 2%. When orders fall, unemployment can spike past 15% within months. Three hundred miles south, Dana Simons runs the Next Step Foundation, where 14 peer recovery coaches serve roughly 100 Hoosiers battling substance use disorders. Every client is enrolled in the Healthy Indiana Plan. When Senate Bill 2 moved through the legislature in early 2025, Simons warned that layering Medicaid verification on top of treatment compliance creates “one more layer where things can go wrong.”
Indiana enters the OBBBA era with distinctive contradictions. The state has more experience with Medicaid conditionality than any other expansion state. The Healthy Indiana Plan’s POWER accounts have required monthly contributions since 2015. Gateway to Work received CMS approval in 2018. Senate Bill 2 was signed May 2025. And yet, Indiana has never actually enforced work requirements on a single enrollee. The state has practiced conditionality extensively but implemented work verification not at all.
Gateway That Never Opened and POWER Accounts#
Gateway to Work was approved by CMS in February 2018. When it launched January 1, 2019, the state identified more than 200 partner organizations. Federal courts vacated Arkansas and Kentucky waivers in March 2019, creating legal uncertainty that led Indiana to pause. COVID-19 triggered continuous enrollment, and Gateway remained suspended. Biden administration revoked authorization in June 2021. Indiana designed a system, received federal approval, built infrastructure, partnered with 200+ organizations, and watched it sit idle for seven years.
What Indiana does have is a decade of experience with different conditionality. HIP 2.0’s POWER accounts require monthly contributions ranging from $1 to $27. Non-payment triggers consequences: members above poverty face lockout, while members below poverty shift to State Plan benefits eliminating dental, vision, and chiropractic coverage. Approximately 80 to 85% of members make payments consistently. The 15 to 20% who do not tend to be members with chronic conditions, lower incomes, and less stable circumstances, precisely the population most likely to face work verification challenges. Verifying whether someone paid $15 is binary data check. Verifying whether someone worked 80 hours across multiple part-time jobs requires documentation from external sources and activity categorization that premium tracking never demanded.
Compounding Conditionality and Fiscal Crisis#
Indiana is poised to become the first state where expansion adults face simultaneous requirements: POWER account contributions monthly, work activity thresholds verified semi-annually, and eligibility redeterminations FSSA began implementing quarterly for 47% of Medicaid-eligible individuals. The 15 to 20% POWER non-payment rate provides a floor estimate for work verification non-compliance. Indiana’s unwinding experience offers preview: when the state resumed redeterminations after pandemic, more than 401,000 people were disenrolled by January 2024.
Indiana’s work requirements are inseparable from fiscal crisis surrounding HIP financing. HIP is funded entirely outside general fund. The state’s 10% share comes entirely from Hospital Assessment Fee and cigarette taxes. OBBBA’s provider tax restrictions threaten this model. Indiana taxes hospitals at 6% and leverages resulting federal reimbursement. New federal law would cap provider taxes at 3.5%, potentially halving collection. Roob described the situation as “five-alarm fire.” The interaction creates perverse incentives. Disenrolling members through work requirement failures reduces the denominator that justifies provider tax revenue, potentially accelerating the fiscal crisis. Indiana would have fewer dollars and fewer members, but members who remain would be more medically complex and expensive.
Three Indianas#
Implementation challenges vary sharply across geography. Indianapolis metro has concentrated workforce development infrastructure, multiple MCOs, and diversified economy. Northwestern Indiana centered on Gary represents post-industrial America with high poverty, limited employers, and health burdens from environmental contamination. The expansion population here is disproportionately Black and faces labor markets where available work is often temporary and part-time. Southern Indiana shares characteristics with Kentucky’s Appalachian counties: rural poverty, substance use disorders, and provider shortages where monthly hour requirements collide with structural economic barriers.
The Bottom Line#
Indiana’s significance lies in the gap between accumulated experience and the challenge ahead. No other expansion state has spent a decade operating conditionality requirements. No other state has POWER account data showing what happens when members must meet monthly compliance obligations. The contested employment data will resolve empirically. If half of HIP enrollees have zero income, Indiana will see either massive employment gains or massive coverage losses. If three-quarters already work or qualify for exemptions, Indiana will confirm what Arkansas demonstrated: work requirements function primarily as documentation burdens on people already doing what policy demands. Because HIP is funded entirely through provider taxes rather than general fund appropriations, enrollment reductions from work requirement failures reduce the revenue base that sustains the program. Indiana has practiced conditionality. The question is whether practice makes perfect or merely documents how hard the real thing will be.