Indiana's Innovative Plan to Streamline Aging Services and Cut Medicaid Costs

Clere announced plans to empower the Family and Social Services Administration to review and potentially reorganize Indiana’s 16 Area Agencies on Aging. These agencies, crucial for delivering services to seniors and people with disabilities, span all 92 counties in the state.

Indiana Medicaid officials recently explained that a forecasting error in 2023, raising concerns over spending, arose from increased use of home and community-based services through Medicaid waivers. In response, a House committee approved a measure aimed at strengthening existing programs to “redirect” individuals from more costly Medicaid services.

Lawmakers argue that House Bill 1391 would launch a pilot program tapping into other state-managed services offered by the Area Agencies on Aging. It strategically centers on the CHOICE program to pioneer Indiana’s inaugural “genuine Medicaid diversion program” for elderly Hoosiers.

Ryan Keller, leading the Area Agency on Aging in Vigo County, has dedicated over a year to developing this pilot initiative. He highlighted that care in assisted living or nursing facilities often incurs higher costs than early or preventative care interventions.

“We zeroed in on the primary factors triggering Medicaid involvement—namely, loss of independence due to falls or ineffective chronic disease management,” Keller noted.

Expected to accommodate up to 1,000 participants, the program could potentially save the state tens of millions of dollars. Keller emphasized that if scaled, this model could result in $8 billion to $10 billion savings in state and federal expenditures.

“This is not trivial by any measure; it’s a promising strategy to decelerate our aging population’s shift into the expensive Medicaid system,” Keller remarked.

This pilot is a joint venture with the University of Notre Dame, providing the state valuable insights to shape future strategies.

Bill sponsor Rep. Ed Clere (R-New Albany) pointed out that the CHOICE program hasn’t seen modernization in over a decade, presenting a timely chance to enhance its effectiveness within the Medicaid waiver framework.

Clere reiterated that the bill empowers the Family and Social Services Administration to explore the restructuring of Indiana’s 16 Area Agencies on Aging, extending essential services to seniors and those with disabilities across the entire state.