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 and Contributions

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 M.E.D. Works.  You may also be required to make a contribution for the Healthy Indiana Plan.  For example, if you are a member of the Healthy Indiana Plan (HIP), you may have a monthly contribution of $20.00 that you must pay each month in order for your HIP coverage to continue.

If you do not pay the premium or contribution, you will not continue to have the insurance.  It is very important that if you have a premium or contribution, 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 denied coverage for a determined amount of time due to your lapse in payment. Premiums and contributions vary per Medicaid program, and some programs may not have any premiums or contributions. You will be notified that you will be responsible for a premium or contribution once you have received your determination notice from the Division of Family Resources.


The spend-down provision was removed for most Indiana Medicaid recipients due to the recent eligibility changes for the aged, blind, and disabled.  For more information about these changes, please refer to the Medicaid Disability Eligibility Changes webpage.

Patient Liability

Most individuals residing in long term care facilities, including nursing homes, will be responsible to pay a portion of their income to the long term facility, and Indiana Medicaid would pay the remainder of the nursing home costs and other covered medical expenses.  This is known as the "patient liability".  Certain deductions are allowed from the person's income when determining the amount that needs to be paid to the facility.  Such deductions include: a personal needs allowance, premiums for other health insurance coverage, a spousal allocation that provides income support to the spouse that lives at home, medical expenses not covered by Indiana Medicaid or other third party insurance, and court-ordered guardianship not greater than $35 per month.

Waiver Liability

Some individuals that are receiving home and community based services under an Indiana Medicaid waiver may have to pay a portion of their monthly income for some medical expenses if their income exceeds a certain amount.  This is known as the "waiver liability" and is the portion of the monthly medical expenses that the individual would be responsible in paying to a certain provider(s).  Indiana Medicaid would pay the remainder of the medical expenses for that month.