Medicaid Payment Expectations

Medicaid and Other Insurance

You may hear Medicaid referred to as the "payer of last resort."  This means that all other forms of insurance will be exhausted before your Medicaid coverage pays for services and drugs. It is important to understand that your medical bills will first be paid by any private insurance coverage that you may have through your employer or possibly the employer of your spouse or parents, depending on your marital status and age. Following private insurance, if you are a Medicare recipient, Medicare will pay medical bills. Medicaid will then cover remaining authorized expenses after all of your liabilities are met.


Co-pays are an agreed upon rate that you pay out of pocket for a service or drug at the time of purchase. An example of a co-pay is when filling a prescription for a generic drug through your local pharmacist: you will pay a $3.00 co-pay for the drug.  Co-pays vary per Medicaid program, and some may not have any co-pays for drugs or services.


Premiums are out of pocket expenses that you will pay to maintain your insurance coverage through Medicaid.  You may be required to pay a premium if you are enrolled in Hoosier Healthwise or the Healthy Indiana Plan.  For example, if you are a member of the Healthy Indiana Plan (HIP), you may have a premium of $45.00 that you must pay each month in order for your HIP coverage to continue.  If you do not pay the premium, you will not continue to have the insurance.  It is very important that if you have a premium you pay it on time each month so you do not lose coverage.  If you lose coverage because of non-payment, you will have to reapply for the program and could potentially be put onto a waiting list or denied coverage for a determined amount of time due to your lapse in payment. Premiums vary per Medicaid program, and some programs may not have any premiums. You will be notified of a premium when you are notified of your enrollment into Medicaid.


In certain cases, a Medicaid member may have income or resources that are too high to qualify for Medicaid services; in these cases, the member has what is called a spend-down. A spend-down is the amount of money a person must spend on qualified medical expenses each month before Medicaid will pay for services.  After the spend-down is met each month, Medicaid will begin to cover the remaining medical expenses that you have incurred. An example of spend-down is:

Your income is $1000.00 monthly.

The income limit for Medicaid is $700.00 per month.

The spend-down is the difference between the income limit ($700.00) and your income ($1000.00) equaling $300.

Therefore, you must incur $300.00 in medical expenses each month before Medicaid coverage will begin to pay for services. You can meet your spend-down by paying for any medical service that is covered by your Medicaid program.  This includes prescription drugs or doctor visits.  REMEMBER: This is just an example and is not indicative of what the income limits are or what your spend-down will be if you are over the income limit. Many members do not have a spend-down at all. You will be notified of any spend-down you will have when you are notified of acceptance into Medicaid.