Indiana to Enforce New Medicaid Work Rules Jan. 1 — Addiction Treatment Is an Exemption

Indiana says more than 58,000 people covered by its Medicaid program for low-income adults are not yet meeting — or documented as exempt from — work requirements that take effect Jan. 1, 2027. For families navigating addiction, one line in the state's own exemption list matters as much as the headline number: being in a drug or alcohol treatment program, or living with a substance use disorder, is grounds to be excused.

On Oct. 5, the Indiana Family and Social Services Administration (FSSA) published a notice stating that it "estimates that more than 58,000 Healthy Indiana Plan (HIP) members may not currently be in compliance with — or exempt from — the HIP Work Requirements that will begin January 1, 2027."

The figure, the agency said, "reflects the most recent data available and underscores the urgent need for members to review their status to avoid losing coverage."

What the rule actually requires

HIP is Indiana's Medicaid program for adults who qualify under the Affordable Care Act's Medicaid expansion. Starting Jan. 1, 2027, FSSA will require new applicants and existing HIP members to complete what it calls HIP Work Requirements each month to stay eligible.

According to FSSA, there are three ways to meet the requirement:

• Log 80 hours a month of one qualifying activity, or a combination of them: working a job, attending school, serving in an apprenticeship, participating in a work program, or volunteering in the community.
• Attend school or an apprenticeship at least half-time, which satisfies the requirement without tracking hours.
• Earn at least $580 in the month — or, for a seasonal worker, average $580 a month over the prior six months.

Adults enrolled in HIP must meet the requirement if all of the following are true: they are ages 19 to 64, are not pregnant, and are not enrolled in or eligible for Medicare.

The exemptions — including treatment and a substance use disorder

FSSA's rules list a set of exemptions. A member does not have to meet the work requirement for a month if, for at least one day that month, any of the following is true:

• They are under 26 and were formerly in foster care.
• They are a member of a federally recognized Tribe.
• They are a parent or caregiver of a child age 13 or younger.
• They are a caregiver of a person with a disability.
• They are a veteran with a total (100%) disability rating.
• They are pregnant, or it has been 12 months or less since their pregnancy ended.
• They are in jail or prison, or were released in the last 90 days.
• They are already following the work rules for SNAP or TANF.
• They are in a drug or alcohol treatment program.
• They are medically frail or have special medical needs — a category FSSA says includes being blind or having a disability, having a substance use disorder, having a serious mental health condition, having a serious physical, intellectual or developmental disability, or having another serious or complex medical condition.

FSSA adds that "other exemptions may also apply" and that it "will release additional information as it becomes available."

For people in recovery, the exemptions are significant for two reasons. First, active treatment itself is a qualifying exemption — a person enrolled in a drug or alcohol treatment program does not need to separately document 80 hours of activity. Second, because the exemption turns on a single day within a month, an enrollment that is current at any point in that month can protect coverage for the whole month. Because a substance use disorder also falls under the broader "medically frail or special medical needs" category, some Hoosiers who are not currently in a formal program may still qualify — but that status generally has to be documented.

Where the requirement comes from

Indiana is not acting alone. The 2025 federal reconciliation law requires states to impose work requirements on certain adults in Medicaid expansion coverage, and KFF's Medicaid policy watch reports that 44 states are required to implement new work requirements on certain adults — 41 expansion states and 3 non-expansion states.

KFF also notes that the same law directs 41 Medicaid expansion states to shorten eligibility renewals for expansion adults from once a year to every six months, and that all states are now required to restrict eligibility for certain lawfully present immigrants. KFF estimated shortly after the law's enactment that it would reduce federal Medicaid spending by $911 billion over 2025–2034 and increase the number of uninsured people by 7.5 million in 2034. KFF describes the changes as "administratively challenging" for states to carry out, and warns that the drop in enrollment could shift costs to providers as more people become uninsured but still need care.

What Indiana is doing to reach members

FSSA said its outreach began in June 2026 and has so far included notifications to more than 500,000 HIP members, partner communications, social media messaging, listserv alerts and eight in-person town halls across the state, with more planned. Starting July 1, 2026, some members began receiving an initial notice; the agency also sends periodic informational texts from the number 43816, which it says never ask for case information and do not affect benefits.

"Please review the HIP Work Requirements, set up a Benefit Portal account if you don't already have one, and use the pre-screening tool to determine if HIP Work Requirements apply to you," said FSSA Secretary Mitch Roob. "Our goal is for every eligible HIP member to do what's necessary to keep their coverage."

Indiana has published a HIP Work Requirements Pre-Screening Tool, which lets a member answer a short set of questions to see whether they are subject to the requirement or likely exempt. The town halls are being run in partnership with the nonprofit Covering Kids & Families.

Why coverage continuity matters in a state hit hard by overdose

Indiana has one of the highest overdose death tolls in the Midwest, even as the trend has improved sharply. CDC provisional counts show Indiana's drug overdose deaths over the 12 months ending in April 2026 at 1,269 — down from 1,593 a year earlier and 2,792 in the 12 months ending April 2022. That is a real decline, and still more than a thousand deaths a year.

That trend is the backdrop for a practical concern: interrupting Medicaid coverage can interrupt care. Medicaid is a primary payer for addiction treatment, including medications for opioid use disorder such as buprenorphine and methadone, along with counseling and recovery supports. For someone in early recovery, a lapse in coverage can mean a lapse in the treatment that keeps them stable — which is exactly why the state's treatment and substance-use exemptions are worth understanding now, months before enforcement begins.

What to do before Jan. 1

• Check your own status. Use Indiana's HIP Work Requirements Pre-Screening Tool and review your FSSA Benefit Portal account.
• If you are in treatment, say so. Members enrolled in a drug or alcohol treatment program, or living with a substance use disorder, should tell their provider, case manager or navigator so the exemption is documented.
• Keep the paperwork. Because exemptions depend on being true for at least one day in a month, records from a treatment program or clinician can matter.
• Ask for help. HIP can be reached at 877-GET-HIP9 (877-438-4479), and certified navigators can help with applications and renewals.

Anyone who needs treatment or support can call the SAMHSA National Helpline at 1-800-662-4357 (free, confidential, 24/7), find treatment at findtreatment.gov, or reach the 988 Suicide & Crisis Lifeline by calling or texting 988. Indiana residents can also dial 211 for local health and human services.