Indiana's CHOICE program will formally have a "Medicaid diversion" pilot as part of its mission to extend senior independence. (Lauren Chapman/IPB News)
For decades, Indiana’s Community and Home Options to Institutional Care for the Elderly and Disabled program — CHOICE, for short — has sought to keep Hoosiers out of long-term care facilities through home modifications and services like meal delivery or transportation.
After the 2025 legislative session, it will also become a “Medicaid diversion program” in two pilot areas.
CHOICE’s supporters don’t see the new duty as an expansion of the program, but rather codifying something it’s already doing.
“The CHOICE program has always been a Medicaid diversion program,” said Rep. Ed Clere, R-New Albany. “This year’s legislation makes that explicit.”
Created in 1987, CHOICE is funded entirely with state dollars, but pivoted in 2014 to focus on preventative services with updated eligibility guidelines. Additionally, the program offers services on a sliding scale, meaning that there are no income restrictions on eligibility.
“I don’t think it should be the policy of the state to wait until people are on the brink of losing independence and in poverty before we help them try to stay in their home or in another community-based setting and avoid institutionalization,” said Clere. “… since its inception, the CHOICE program has helped countless Hoosiers maintain their independence and, as a result, their quality of life.”
Dollars are funneled through the state’s Area Agencies on Aging, which are scattered around the state. The two pilot areas will be in the eastern and western parts of the state, in areas surrounding Richmond and Terre Haute, respectively.
Thrive West Central, in Terre Haute, will spend the next year setting the pilot up and identifying ways to prolong a Hoosier’s independence, with a special focus on fall prevention and chronic disease management.
“We think this is a fascinating study and we think it’s great for older Hoosiers,” said Ryan Keller, the executive director of Thrive. “We think this could change the trajectory of our folks, of our aging people, going on Medicaid.”
Other important provisions of the new law, which goes into effect in July, add dementia education services for caretakers and allows the overseeing agency to study the feasibility of realigning Indiana’s senior care organizations. The state currently has 15 providers covering 16 areas, but the geographic area and population of each varies widely.
Could the program decrease Medicaid costs?
Nursing homes and other institutional forms of long-term care made up 19% of the state’s Medicaid expenses in 2024, despite the fact that only 2% of the state’s enrollees used those services.
According to the 2025 CHOICE report, the annual cost of a CHOICE enrollee is $5,203 per year. In comparison, the average nursing home resident costs the state $28,343 annually — though such care is the most expensive form of long-term care.
Of the 5,631 Hoosiers who used CHOICE in 2024, 3,439 were Medicaid eligible.
Earlier this year, student teams at Butler University analyzed Medicaid patient data provided by the Family and Social Services Administration with the goal of identifying underlying cost drivers.
The students identified falls as a major health concern, concluding that more than 30% of Indiana’s seniors experienced falls annually. Injuries from such events are one of top reasons why someone transitions from independent living to institutional care.
As outlined in a release from collaborator Parkview Health, if half of the state’s seniors participated in annual fall assessments, that alone could save the state an estimated $115 million and prevent 41 deaths each year.
To Hannah Carlock, a vice president with RJL Solutions currently serving as interim CEO of the AAAs association, CHOICE is a natural solution to reduce Medicaid enrollment and costs.
“We’re seeing more and more people declining on Medicaid, so why don’t we really bolster the CHOICE program?” she asked. “… it’s very cost effective and, clearly, being at home you have a better quality of life.”
In particular, CHOICE has been used as an option to prolong someone’s independence before they might need Medicaid waiver services — an especially crucial offering as thousands continue to languish on the state’s waitlists.
In addition to falls, the Medicaid diversion pilot program seeks to target chronic disease management, such as heart disease or diabetes.
“Even though you may have chronic, congestive heart failure or you have diabetes … those diseases can be managed to a certain degree,” said Keller.
Carlock, Keller and Clere pointed to specific, small interventions that can help aging seniors such as:
- Eliminating trip hazards like throw rugs
- Putting grip pads under rugs on slippery surfaces, like tile
- Putting washers and dryers on the main floor so people don’t have to carry heavy laundry baskets down a flight of stairs
- Grab bars in bathrooms
- Methods to track medication usage
- Connecting someone to transportation and meal services
“Those two key categories just seem very natural, very intuitive, and they’re all things that are controllable in our environment,” Keller said about the Medicaid diversion pilot. “This is where we feel like we have the greatest control to go and start a dedicated diversion program so we can slow, delay or prevent folks from having these kinds of preventable accidents.”
“We really do believe that, with small interventions on the preventative side of things, that it can have huge, lasting echoes of cost savings on the backend,” he continued.
Evaluating the effectiveness of the program, and the final report, will be done by Notre Dame University’s Wilson Sheehan Lab for Economic Opportunities, with specific parameters set to be defined in the coming weeks.
How will we pay for it?
Clere’s House Enrolled Act 1391 didn’t initially include “Medicaid diversion” specifically, but emerged after discussions with Clere’s peers in the General Assembly. The prospect of decreasing the state’s Medicaid commitment — Indiana’s fastest-growing and second-largest expense — became even more appealing in the last week of session after lawmakers learned of a $2 billion budget shortfall.
But, like nearly every other spending category, CHOICE got a 5% cut in the final budget — falling from $48.8 million each year to $46.2 million. AAAs got $29.3 million of those dollars in 2024.
The senior care organizations charged with overseeing the pilot program will have to work within their existing budgets to get the project off the ground — though private partnerships could buoy their efforts.
Keller pointed to one potential avenue for funds: the nearly $2 million AAAs left unspent in the last year. Such a reversion occurred due to the “unpredictability” of a community’s needs, Keller said, as demand varied from month-to-month.
But AAAs will also have the chance to save some needed funds under another part of Clere’s bill: striking the requirement for some service providers to be Medicaid approved.
With the change, “CHOICE dollars will go five times as far,” Keller said.
Keller used building a ramp as an example. Though his community, and many others, have volunteer groups to provide free labor, they’re not approved as a provider by Medicaid. That means no CHOICE dollars can be used to purchase the needed materials.
A Medicaid-approved provider might charge somewhere between $15,000 and $20,000 for a job that another group would do for $3,000, he said.
“Nothing’s different … it’s the same boards, the same screws, same everything. But that’s the cost difference,” Keller said.
Clere said that identifying which services to decouple from Medicaid approval and partnering with Notre Dame was part of the collaborative legislative process, noting that the proposal was amended a handful of times before becoming law.
“I’m confident (decoupling) will lead to a lot more options and competition, which will provide opportunities for additional cost savings,” said Clere.
Clere, who has been a member of the CHOICE program’s board for well over a decade, admitted that it’d become a “big part of (his) legislative focus and work.”
“I’m very passionate about it. I’ve seen the difference it can make in the lives of individuals and families,” he said, “… I’m excited about HEA 1391 and everything it represents and all of the good things that are going to come from it.”
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
