The Centers for Medicare and Medicaid Services, or CMS, recently released a new definition of medical frailty that Indiana groups say is more restrictive than expected.
The nearly 400-page rule stops states from offering blanket work exemptions to all people with HIV, cancer and other serious medical conditions, potentially leaving some patients without coverage.
Specifically, the rule requires people on Medicaid to prove that their illness is enough to keep them from working the required 80 hours a month.
That rule is part of the new federal work requirements, which are set to go into effect in 2027. Paired with Indiana’s other more restrictive Medicaid requirements, hundreds of thousands in Indiana are expected to lose insurance.
The new definition of medical frailty is likely to cut even people from the program, said Alan Witchey, CEO of the Damien Center, an Indianapolis nonprofit dedicated to fighting HIV.
“I believe it will be a really major healthcare crisis in 2027 if this rule is to go into effect,” he said.
A spokesperson for the Indiana Family and Social Services Administration said they were “sorting through all of the guidance, we have nothing to say right now but in a few weeks we will be releasing our complete plan.”
States had been waiting for clarity about the federal definition of medical frailty, following the passage of the One Big Beautiful Bill Act, or OBBBA, last year. That’s when initial Medicaid work requirements were set - even though they did not immediately go into effect.
Witchey said the federal definition of medical frailty will put more pressure on health clinics and hospitals to pick up the tab on care.
“More health clinics like ours are going to find themselves financially struggling as our uninsured population continues to grow. There isn't a way to pay for that medical care,” he said.
Health advocates like Witchey say most people already work while receiving Medicaid, and the added burden of extra paperwork on top of serious illness is what will ultimately cut them from the program.
That’s especially concerning because the state already seems poorly equipped to handle the existing paperwork load.
Tracey Hutchings-Goetz with Hoosier Action said it’s unclear if there are enough people at the agency currently to manage the workload.
The state seemed to realize this in April when it announced plans to bring on 400 new employees to monitor work requirement eligibility.
“It seems like FSSA was understaffed to begin with. They are trying to hire more people, and there is simply more paperwork,” she said. “Now, a question that FSSA has not answered publicly, and neither has the General Assembly, is ‘will any of these changes save money?’”
The state has already seen roughly 400,000 people lose Medicaid coverage since early 2025, something Hutchings-Goetz attributes to the more frequent income eligibility checks started last year.
State officials have attributed declining enrollment and eligibility checks to nearly $400-million dollars in state savings.
At the same time, hospitals have warned that having fewer people covered will ultimately lead to more people utilizing emergency rooms.
Data provided by the Indiana Hospital Association shows a nearly 17% increase in Emergency Department visits between January and August of 2025, with many patients showing up without health coverage.
“Hospitals will continue to care for every patient who walks through their doors, but as coverage declines, uncompensated care rises, which adds to the financial strain for hospitals already operating on thin or negative margins,” said Scott Tittle, President of the Indiana Hospital Association, in a statement.
Indiana Republicans have argued that changes to the state Medicaid program are about ensuring the long-term integrity and affordability of the program. Lawmakers said parts of the OBBBA could end up costing the state millions if action isn’t taken.
All of this leaves Hutchings-Goetz concerned about what will happen when additional work requirement eligibility checks go into effect in 2027.
“It definitely seems like we are poised for a further acceleration of our healthcare crisis,” she said.
Contact Government Reporter Benjamin Thorp at bthorp@wfyi.org
