Indiana’s Medicaid system is bracing for major upheaval after the state’s Family and Social Services Administration (FSSA) announced it will terminate its contract with MDwise, the only provider-led, nonprofit managed care plan serving Indiana Medicaid. The decision, effective January 1, 2026, will impact more than 300,000 Hoosiers who currently rely on MDwise for their health coverage and puts more than 230 Indiana-based jobs at risk.
The FSSA made the announcement on November 12, 2025, stating that MDwise would no longer be an option for members of the Healthy Indiana Plan (HIP) and Hoosier Healthwise programs. Instead, affected members must select a new health plan from one of the remaining providers—Anthem, CareSource, or MHS—during the upcoming open enrollment period. For those who do not make a choice, the state will automatically assign a plan, though members will have a 90-day window after January 1 to switch if they wish.
The move follows what the FSSA describes as a “comprehensive review of MDwise’s performance and its ability to meet FSSA’s standards for member services, provider support, and program accountability,” as reported by WTWO/WAWV. Secretary Mitch Roob, head of the FSSA, explained, “Our review found that, of the four plans, MDwise was both the most expensive and the lowest in quality. Federal rules require us to maintain at least three plans, and this decision allows us to meet those standards while safeguarding members’ access to care.”
According to the FSSA, the decision is intended to “ensure the long-term strength and sustainability of Indiana Medicaid,” a program that provides critical health coverage to low-income individuals and families across the state. The agency emphasized that no one will lose Medicaid benefits as a result of the change, and that existing authorizations and treatments will be honored during the transition.
Yet, for MDwise and its supporters, the state’s reasoning rings hollow and the consequences could be severe. In a strongly worded statement, MDwise pushed back: “The Indiana Family and Social Services Administration’s attack on MDwise should concern every Hoosier, especially those who rely on Medicaid for their health care needs. We have operated in good faith at every turn, and the state’s decision to terminate our contract ‘for convenience’ is unjustified and fails to consider the harm it will cause members, providers, employees, and communities.”
MDwise, which has served Indiana for over 30 years, warned that the termination could “destroy” its business, resulting in hundreds of layoffs and significant disruption for patients. The nonprofit highlighted its unique position as Indiana’s only provider-led, nonprofit managed care plan, focused exclusively on serving Hoosiers.
The company also raised alarms about the impact on patient care, noting that members may have to find new doctors and care managers as they shift to different health plan networks. This could jeopardize continuity of care for patients with chronic conditions and potentially lead to interruptions in medications. “Instead of working together toward an orderly solution, the state has chosen a rushed path that jeopardizes care for hundreds of thousands of Hoosiers. MDwise presented multiple proposals to ensure a smooth, responsible transition – all of which have been ignored,” the company asserted.
MDwise further disputed the FSSA’s assessment of its cost and quality, claiming a “strong performance record with no prior concerns from the FSSA regarding plan costs.” The company argued that the state’s move was motivated not by performance issues but by budget pressures. “FSSA is trying to avoid paying the true cost of care for Hoosiers,” MDwise said in its statement. “During discussions with FSSA in September, it became clear that FSSA’s real motivation for pursuing a termination was not MDwise’s performance, but rather because the State’s policies put Medicaid spending on an unsustainable path.”
MDwise also challenged the notion that its higher costs were unjustified, stating, “Cost needs to be viewed in terms of value: health plans that deny or erect barriers to care will have lower costs. Health plans that treat sicker members will have higher costs.” The company accused the FSSA of failing to provide credible data supporting claims of high costs and poor quality, emphasizing that the termination was made “without cause.”
For affected members, the FSSA has promised a transition plan designed to minimize disruption. Emails with detailed instructions on selecting a new plan will be sent to all current MDwise members, and the state’s enrollment broker is available to assist with questions. The FSSA also stated that existing authorizations and treatments will be honored during the transition, aiming to ensure that patients do not experience gaps in care as they move to new providers.
Despite these assurances, the scale of the change is significant. MDwise’s departure means more than 300,000 Hoosiers must navigate the process of selecting a new health plan, and potentially a new network of doctors and specialists. For many, especially those managing complex or chronic health conditions, the transition could be daunting.
The broader context for the FSSA’s decision is the ongoing challenge of balancing cost, quality, and access in Medicaid programs nationwide. States are under pressure to keep spending in check while maintaining high standards of care for vulnerable populations. In Indiana, federal rules require at least three managed care plans to ensure competition and choice for members, but the FSSA’s review concluded that MDwise no longer met the necessary benchmarks.
While the FSSA insists that the move is about long-term sustainability and quality improvement, MDwise’s defenders see it as a loss for both patients and the state’s healthcare workforce. With more than 230 jobs on the line and the potential for widespread disruption, the stakes are high for everyone involved.
As the January 1, 2026, deadline approaches, all eyes will be on how smoothly the transition unfolds—and whether the FSSA’s assurances prove true for the thousands of Hoosiers whose health and livelihoods are affected by this sweeping change.
