At a glance: Medicare health insurance in Indiana
- In Indiana, more than 1.25 million residents are enrolled in Medicare.
- About 29 percent of Indiana Medicare beneficiaries are enrolled in Medicare Advantage plans.
- 50 insurers offer Medigap plans in Indiana. The state does not require Medigap insurers to offer plans to people under age 65, but that will change as of mid-2020, under the terms of legislation the state enacted in 2019.
- More than three-quarters of Indiana Medicare beneficiaries have Part D prescription coverage, either under a stand-alone plan or as part of their Medicare Advantage plans.
- Per-enrollee Original Medicare spending in Indiana is slightly higher than the national average.
Medicare enrollment in Indiana
1,254,652 Indiana residents were enrolled in Medicare coverage as of July 2019. That’s a little more than 18.6 percent of the state’s population, which is very similar to the share of the total United States population enrolled in Medicare.
Most people become eligible for Medicare when they turn 65 years old, but Medicare eligibility also begins after a person has been receiving disability benefits for 24 months, or has ALS or end-stage renal disease. Nationwide, 16 percent of all Medicare beneficiaries are eligible due to disability. In Indiana, it’s slightly higher, with 17 percent of the state’s Medicare population under age 65 and eligible due to disability.
Medicare Advantage in Indiana
Medicare beneficiaries can choose to receive their benefits directly from the federal government via Original Medicare or enroll in a private Medicare Advantage plan (as long as Advantage plans are available in their area, which is the case in most of the country). There are pros and cons to either option, and the right approach differs depending on the enrollee’s circumstances and coverage needs.
Twenty-six percent of Medicare beneficiaries in Indiana were enrolled in Medicare Advantage plans as of 2017, compared with an average of 33 percent nationwide. As of November 2018, there were 367,477 Indiana Medicare beneficiaries enrolled in private Medicare plans (as opposed to Original Medicare; that figure does not include people who had private coverage to supplement Original Medicare), which amounted to more than 29 percent of the state’s Medicare population. That’s in keeping with the national trend of increasing enrollment in Medicare Advantage plans over the last several years.
Medicare Advantage plan availability varies from one country to another. For 2019, Indiana residents can choose from among at least 11 Medicare Advantage plans, and up to 29 plans, depending on where they live.
Medicare’s annual election period (October 15 to December 7 each year) gives Medicare beneficiaries the opportunity to switch between Medicare Advantage and Original Medicare (and add or drop a Medicare Part D prescription plan). And as of 2019, Medicare Advantage enrollees also have the option to switch to a different Advantage plan or to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.
Medigap in Indiana — Plan A guaranteed issue for disabled enrollees as of mid-2020
More than half of Original Medicare beneficiaries receive supplemental coverage through an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans) are designed to pay some or all of the out-of-pocket costs (deductibles and coinsurance) that Medicare beneficiaries would otherwise have to pay themselves. Original Medicare does not limit out-of-pocket costs, so most enrollees maintain some form of supplemental coverage; Medigap plans are what’s available for people who don’t have access to an employer-sponsored plan (including retiree plans) or Medicaid.
Although Medigap plans are sold by private insurers, the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N), and the benefits offered by a particular plan (Plan A, Plan F, etc.) are the same regardless of which insurer is selling the plan. So plan comparisons are much easier for Medigap policies than for other types of health insurance; consumers can base their decision on premiums and less tangible things like customer service, since the benefits themselves are uniform.
50 insurers offer Medigap plans in Indiana. UnitedHealthcare/AARP also offers Medicare SELECT Medigap plans in Indiana. According to an AHIP analysis, 366,003 people in the state had Medigap coverage as of 2016.
Unlike other private Medicare coverage (Medicare Advantage and Medicare Part D plans), there is no annual open enrollment window for Medigap plans. Instead, federal rules provide a one-time six-month window when Medigap coverage is guaranteed-issue. This window starts when a person is at least 65 and enrolled in Medicare Part B (you must be enrolled in both Part A and Part B to buy a Medigap plan).
People who aren’t yet 65 can enroll in Medicare if they’re disabled and have been receiving disability benefits for at least two years, and 17 percent of Indiana’s Medicare beneficiaries are under age 65. But federal rules do not guarantee access to Medigap plans for people who are under 65. However, the majority of the states have rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans. And although Indiana is not yet among them, that will change as of mid-2020, thanks to legislation that was enacted in 2019 (S.B.392).
The bill passed with strong support in both chambers of Indiana’s legislature, and was signed into law in May 2019. As of July 2020, it will require Medigap insurers to offer at least one Medigap plan (Plan A) to Medicare beneficiaries who are under 65 and eligible for Medicare due to a disability. The legislation will require Medigap insurers to grant Medicare beneficiaries a six-month open enrollment period that begins when they’re enrolled in Part B (or determined eligible for retroactive Part B coverage), regardless of age. And for Indiana residents who are under 65 and already enrolled in Medicare due to a disability, a one-time enrollment window will begin July 1, 2020.
Indiana will join several other states that require Medigap insurers to offer at least one plan on a guaranteed-issue basis to disabled Medicare beneficiaries. But unlike some of those states, Indiana’s legislation does not limit premiums for these enrollees (ie, there is no requirement that premiums be the same as the rates for people who are 65, so they are likely to be significantly higher).
And until mid-2020, Medigap insurers in Indiana are not required to offer coverage to beneficiaries under the age of 65—and the state notes that none of them have voluntarily chosen to do so. Medicare beneficiaries under age 65 can enroll in Medicare Advantage plans unless they have end-stage renal disease (in some areas, Medicare Advantage Special Needs Plans for people with end-stage renal disease are available, and as of 2021 as a result of the 21st Century Cures Act, Medicare Advantage plans will be guaranteed issue for all Medicare beneficiaries, including those with ESRD).
Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those regulations don’t apply to Medigap plans. Medigap insurers can impose a pre-existing condition waiting period of up to six months, if you didn’t have at least six months of continuous coverage prior to your enrollment. And if you apply for a Medigap plan after your initial enrollment window closes (assuming you aren’t eligible for one of the limited guaranteed-issue rights), the insurer can look back at your medical history in determining whether to accept your application, and at what premium.
Medicare Part D in Indiana
Original Medicare does not cover outpatient prescription drugs. More than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan (from a current or former employer or spouse’s employer) or Medicaid, and these plans often include prescription coverage. But Medicare enrollees without drug coverage through Medicaid or an employer-sponsored plan need to obtain Medicare Part D prescription coverage. Part D coverage can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan that includes Part D prescription drug coverage.
In 2019 in Indiana, there are 26 stand-alone Part D plans for sale, with premiums that range from about $16 to $92/month.
As of late 2018, there were 947,119 Indiana Medicare beneficiaries who had Part D prescription coverage. About two-thirds had coverage under stand-alone Part D plans, and one-third had Part D prescription coverage as part of their Medicare Advantage plans.
Medicare spending in Indiana
In 2016, Original Medicare’s average per-beneficiary spending in Indiana was $9,852 (based on data that were standardized to eliminate regional differences in payment rates, and did not include costs for Medicare Advantage).
Nationwide, average per beneficiary Original Medicare spending was $9,533 per enrollee, so Medicare spending in Indiana was about 1 percent higher than average. Per-beneficiary Original Medicare spending was highest in Louisiana, at $11,399, and lowest in Hawaii, at just $6,441.
You can read more about Medicare in Indiana in our state Medicare guide. You can also contact the Indiana State Health Insurance Assistance Program with questions related to Medicare coverage in Indiana.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.