Indiana Medicaid Planning: What Families Need to Know

If a parent or spouse in Indiana needs nursing-home care, Indiana Medicaid can pay for it once the person meets the state's asset and income rules. For a single applicant, Indiana's eligibility guide sets the asset limit at $2,000. Indiana also protects part of a married couple's savings for the spouse at home, and it reviews gifts made in the 60 months before applying.

Most people facing a nursing-home admission in Indiana come to this question in the middle of something hard. A mother has had a fall in Fort Wayne. A husband in Carmel can no longer be cared for safely at home. The family is now looking at monthly bills it never planned for. The questions follow quickly: what the family can keep, whether the house is at risk, and what happens to the spouse who stays home. This page sets out how Indiana's own program answers those questions, keeping what federal law requires separate from what Indiana's official manuals state.

How Indiana's Medicaid Program Works for Long-Term Care

Indiana's long-term-care coverage is part of the Indiana Health Coverage Program, which is run by the Indiana Family and Social Services Administration (FSSA). Its policy manual governs eligibility for institutional residents, PACE members and people receiving home- and community-based waiver services. Indiana's eligibility guide describes home- and community-based services as care that lets people with special medical or developmental needs "live in the least restrictive setting while receiving the medical care and supports they need." The specific waiver programs available, and who qualifies for each, depend on Indiana's current rules.

Medicaid is a joint federal and state program, as Medicaid.gov's eligibility policy page explains. Federal law sets the framework, and Indiana runs its own program with its own figures and procedures. A family in Bloomington and a family in Florida are not working under the same rules.

A few terms appear throughout this page:

• A countable asset is property the state counts toward the asset limit.
• An exempt asset is property the state does not count.
• The community spouse is the husband or wife who stays at home while the other spouse receives care.
• The look-back period is the window in which the state reviews gifts.
• A penalty period is a stretch of time during which Medicaid will not pay for long-term care because of a gift.
• Estate recovery is the state's claim against a recipient's estate after death.

This page covers Medicaid for long-term care only. It does not cover Medicare, private long-term-care insurance or veterans' benefits.

Indiana Medicaid Eligibility: Assets, Income, and the Countable-Asset Limit

The asset limit. Indiana Medicaid's member eligibility guide sets a maximum of $2,000 in assets for a single person and $3,000 for a married person.

• Countable assets include bank account balances, cash on hand, stocks and bonds, and property other than the family home.
• Exempt assets include one vehicle, a home "if it is where you live," and burial spaces.

These lists are partial, so whether a particular item counts depends on Indiana's current rules.

The income limit. The FSSA Chapter 3000 eligibility standards set a Special Income Level (SIL) of $2,982 a month, effective January 1, 2026. This limit applies to institutional residents, PACE members and certain waiver recipients. It counts only the individual's income, not a spouse's. Depending on countable income, the person may owe a monthly patient or waiver liability, which is their share toward the cost of care.

Protections for the spouse at home. Federal spousal-impoverishment rules in 42 U.S.C. § 1396r-5 set the framework. They add up the couple's combined resources at the start of the first continuous period of institutionalization and set a "spousal share" equal to half of that total. Indiana's Chapter 3000 figures for 2026 are:

• A state standard of $32,532, effective January 1, 2026.
• A spousal share up to a maximum of $162,660, effective January 1, 2026.
• Any amount of resources a court orders the institutionalized spouse to provide for the community spouse's support.
• A Maximum Maintenance Standard of $4,067 a month, effective January 1, 2026, for the spouse's income.

Federally, the minimum monthly maintenance needs allowance changes each July 1, according to the CMCS bulletin of April 27, 2026. Indiana's current minimum figure depends on its current rules.

Indiana's Look-Back Period and Transfer Penalties

The federal look-back. Federal law, at 42 U.S.C. § 1396p, sets a look-back of 60 months for any transfer made on or after February 8, 2006.

Indiana's look-back. The FSSA Chapter 2600 resources manual states that since November 1, 2014, the review period for transfers of non-trust property is 60 months before the "baseline date." The baseline date is the first date the person was both institutionalized and had applied for Medicaid. The review period "continues indefinitely thereafter."

How the penalty is calculated. A gift, or a sale for less than fair value, can create a penalty period. Indiana calculates the penalty using a divisor: the average monthly private-pay rate for nursing facilities. Under FSSA section 3006.00.00, that divisor is $8,027 for applications filed on and after July 1, 2026. For applications filed from July 1, 2025 through June 30, 2026, it was $7,651.

When the penalty starts. Under federal law, a penalty begins on the later of two dates:

• the month of the transfer, or
• the date the person is eligible and would otherwise be receiving institutional-level care.

Because of this rule, a gift made four years ago is penalized the same way as one made last month, as long as both fall inside the look-back. Indiana's manual gives an example in which the penalty started in the month the applicant was otherwise eligible for long-term care.

Transfers that are not penalized. Not every transfer is penalized. Federal law lists exceptions, including transfers to the person's spouse, which carry no transfer penalty. Separately, 42 U.S.C. § 1396r-5 lets an institutionalized spouse transfer the community spouse resource allowance to the community spouse without regard to the transfer rules. Which other exceptions apply to a family's transfers depends on the facts and on Indiana's current rules.

Planning Tools Indiana Families Use: Trusts, Annuities, and Spend-Down Strategies

For families in Evansville or South Bend, a planning conversation usually starts with the assets they already have. It then turns to which tools the rules recognize. The approaches below are described, not recommended. None of them makes anyone eligible on its own.

Miller trusts. Indiana's Chapter 2600 manual describes the Miller Trust, also called a Qualified Income Trust (QIT). It allows a person whose income is above the Special Income Level to be considered Medicaid eligible. This applies to people in long-term care facilities, PACE members and people on certain waivers. The trust must be funded at least each month with the amount by which the person's income exceeds the Special Income Level. The manual also describes trusts that must pay the State, at the beneficiary's death, any remaining funds up to the total Medicaid benefits paid.

Other trusts. Whether assets in an irrevocable trust count depends on the trust's terms and on Indiana's rules. Transfers into a trust can also fall under the look-back. No trust always protects assets.

Annuities. An annuity converts a lump sum into an income stream. Federal law places conditions on how annuities are treated. Whether a particular annuity counts as a transfer, as income or as an asset depends on those conditions and on Indiana's current rules.

Spend-down. Spending countable assets to reach the limit is permitted. Spending on items the eligibility guide lists as not counted, such as one vehicle or burial spaces, is one recognized approach. Every asset and transfer must be reported fully. A Medicaid crisis planning checklist and a guide to planning before a nursing home explain these choices further.

The Home Under Indiana Medicaid

Many families in Muncie and Indianapolis reasonably wonder whether the house is safe. Indiana's eligibility guide does not count a home "if it is where you live." For long-term care, however, the Chapter 2600 manual applies a home-equity restriction.

What counts as the home. The home is the applicant's principal place of residence before needing long-term-care services. A hospitalization, a visit with family or another absence does not change that designation. Home property that produces income is subject to the equity restriction.

When the restriction does not apply. The restriction does not apply if any of these people lawfully lives in the home:

• the applicant's spouse,
• a dependent child under 21, or
• a blind or disabled child of any age, using SSI standards.

The federal source of this rule is 42 U.S.C. § 1396p(f).

Long-term care partnership policies. Equity covered by the asset protection of a long-term care partnership policy reduces the amount of equity counted above the limit. Indiana's current equity figure depends on its current rules.

Indiana Estate Recovery: What Happens After a Medicaid Recipient Dies

The federal requirement. Federal law requires states to recover certain Medicaid benefits from a recipient's estate. Under 42 U.S.C. § 1396p(b), this covers people who were 55 or older when they received nursing facility services, home and community-based services, and related hospital and prescription drug services. States may choose to recover for other services as well.

What Indiana recovers. The FSSA Chapter 4700 estate recovery manual sets out Indiana's rules:

• What the estate includes. The estate consists of all assets, real and personal, owned by the deceased recipient. It need not be opened through formal proceedings.
• Which benefits are covered. The claim applies to all categories of Medicaid except Medicare cost-sharing benefits. Medicare premiums and cost-sharing benefits are not recoverable.
• When a spouse survives. Recovery waits until after the surviving spouse's death. At that point, only assets that were in the recipient's probate estate are subject to recovery.
• Partnership policies. Resources protected under the Indiana Long Term Care Program are not subject to recovery.
• Cost-effectiveness. A claim may be waived when the cost of collecting equals or exceeds what can be collected.

Federal deferral. Under 42 U.S.C. § 1396p(b)(2), recovery may happen only after the surviving spouse has died, and only when no surviving child is under 21 or is blind or disabled. For a lien on the home, recovery also waits while either of these relatives lawfully lives there:

• a sibling who lived in the home for at least one year before the admission, or
• a son or daughter who lived there for at least two years before the admission and provided care that kept the parent at home.

Deferral postpones the claim; it does not cancel it.

Hardship waivers. Under 42 U.S.C. § 1396p(b)(3), states must also have procedures to waive recovery when it would cause undue hardship.

Applying for Indiana Medicaid: The Process and What to Expect

What the review covers. Whether the application comes from Allen County, Marion County or Monroe County, FSSA applies the same statewide standards. It reviews countable assets against the asset limit, income against the Special Income Level, the spousal figures and transfers within the 60-month review period. The eligibility guide notes that it "is only a guide" and that a person must apply to know whether they qualify. How to apply and which documents are required depend on Indiana's current rules, as the FSSA eligibility guide sets them out.

Spousal assessments. Under 42 U.S.C. § 1396r-5, either spouse may ask the state to assess and document the couple's total resources at the start of the first continuous period of institutionalization. Each spouse receives a copy, along with a notice of the right to a fair hearing.

Appeal deadlines. The FSSA Chapter 4200 appeals manual states that appeals are filed with the Division of Family Resources (DFR). An appeal must be received by close of business, 4:30 p.m. local time, no later than 33 days from the date of the action being appealed. The starting point for those 33 days depends on the situation:

• For actions on applications, the 33 days run from the date the notice is sent.
• For people already receiving benefits, the 33 days run from the effective date of the action on the notice.

Continued benefits during an appeal. When continued benefits are allowed, they are not reduced or ended for the reason under appeal until the hearing decision arrives.

This site provides information about Indiana Medicaid planning and facilitates consultation inquiries. It does not give legal advice, represent anyone or guarantee any outcome. A guide to what a Medicaid planning attorney does describes the questions families often bring to that conversation.

Discussing Medicaid Planning in Indiana

Several things can shape the outcome in an Indiana case. The baseline date fixes how far back FSSA looks. The divisor changes each July. Only probate assets are reached after a surviving spouse dies. A consultation can cover the family's assets and their titling, the dates and amounts of any transfers, the care setting, the income of each spouse, and who lives in the home. This page does not cover Medicare, private long-term-care insurance, veterans' benefits or another state's rules.

To talk these facts through with an attorney, request a consultation about your family's Medicaid and long-term-care options through Medicaid Asset Protection Group.