Indiana Medicaid Estate Recovery 2026: House & Estate Guide

Indiana Medicaid estate recovery applies after death to recipients 55 or older who received long-term care. Here is how Indiana's rules work and what protections apply.

Federal law requires every state to operate a Medicaid estate recovery program, and Indiana carries out that obligation through the Indiana Family and Social Services Administration (FSSA) Office of Medicaid Policy and Planning (OMPP). After a qualifying recipient dies, FSSA may seek repayment for certain Medicaid long-term care costs. Indiana is an expanded-estate state: FSSA's estate recovery program defines a recipient's "estate" to include non-probate assets, meaning any real or personal property conveyed through a non-probate transfer, so recovery can reach beyond the probate estate to some assets that pass outside it.1 The mandatory federal protections (for a surviving spouse, a minor child, and a blind or disabled child) block recovery in a substantial share of cases. A hardship waiver is available when recovery would cause genuine financial distress.

This guide covers who is subject to Indiana Medicaid estate recovery, what assets can be reached, who is protected, how to claim a hardship waiver, and how to respond if the estate receives a claim from FSSA.

Who Does Indiana Medicaid Estate Recovery Apply To?

Indiana Medicaid estate recovery rests on a federal foundation. OBRA-93 (Pub. L. 103-66, Section 13612) added Section 1917(b) to the Social Security Act, codified at 42 USC Section 1396p(b), requiring every state to recover certain Medicaid expenditures from the estates of deceased recipients. The implementing regulation is 42 CFR 433.36.1

Under the federal mandatory floor, Indiana must seek recovery from the estates of residents who were:

• Age 55 or older at the time they received services, AND
• Receiving nursing facility care, HCBS, or related hospital and prescription drug services paid by Medicaid.

Long-term services and supports (LTSS) are what trigger recovery, so someone who received only ordinary Medicaid medical coverage and never any LTSS falls outside what federal law requires Indiana to pursue. Do not read that as a cap on the amount, though. Once recovery is triggered, FSSA's program seeks the total amount Medicaid paid on behalf of the recipient after they turned 55, and in certain other limited circumstances, not just the nursing-home invoices.1 The age threshold is the real dividing line: care paid for before the recipient turned 55 is outside recovery, and care paid for at 55 or older is inside it.

In Indiana, LTSS is coordinated through FSSA's Division of Aging and delivered in part through Indiana PathWays for Aging, the state's managed long-term services and supports program launched in 2024 for members aged 60 and older. HCBS waiver services also fall within the scope of Medicaid LTSS. If FSSA paid for qualifying services for a recipient who was 55 or older, those payments become the basis of a potential estate recovery claim after the recipient's death.2

Indiana is an income-cap state, which means applicants whose gross income exceeds $2,982 per month (the 2026 Special Income Level for nursing-facility and HCBS-waiver coverage) must route excess income through a Qualified Income Trust (Miller Trust) to qualify for LTSS coverage.2 This Medicaid eligibility rule is separate from estate recovery, but families managing both a Miller Trust during life and estate recovery after death benefit from understanding how these two pieces of the Medicaid program interact.

One important federal carve-out: Medicaid payments made solely for Medicare premiums and cost-sharing through the Medicare Savings Programs (QMB, SLMB, QI) are excluded from estate recovery. The carve-out is written into the federal estate recovery statute at 42 USC Section 1396p(b)(1)(B)(ii), which excludes Medicare cost-sharing from the items a state may recover.1 A person who only had a Medicare Savings Program enrollment and never received Medicaid LTSS would not have a recovery claim against their estate.

What Assets Can Be Recovered?

Indiana is an expanded-estate state. The federal statute at 42 USC Section 1396p(b)(4)(B) lets a state define "estate" broadly enough to reach property that passes outside probate, and Indiana has exercised that option in its own law.1 FSSA's estate recovery program defines a recipient's recoverable estate to include not only probate assets but also any property conveyed through a non-probate transfer, real property conveyed to a survivor through joint tenancy with right of survivorship created after June 30, 2002, and annuities purchased after May 1, 2005. That means recovery in Indiana is not limited to the probate estate, and the common assumption that non-probate transfers are automatically safe does not hold here.1

Recovery clearly reaches the probate estate first. Probate assets are those owned in the deceased person's sole name, without a beneficiary designation, joint ownership, or other survivorship mechanism that would transfer them automatically at death. Typical probate assets include:

• Real estate titled solely in the deceased's name (no joint tenancy, no transfer-on-death deed)
• Bank accounts in the deceased's name alone with no payable-on-death (POD) beneficiary designation
• Investment accounts in the deceased's name alone with no transfer-on-death (TOD) designation
• Personal property (vehicles, household goods, personal effects) titled to the deceased
• Business interests held individually

Critically, in an expanded-estate state like Indiana, assets that pass outside probate are not automatically beyond FSSA's reach. FSSA's own estate recovery program lists among recoverable assets: real property conveyed to a survivor through joint tenancy with right of survivorship, funds remaining in a Qualified Income Trust (Miller Trust) as of the date of death, annuities purchased after May 1, 2005, and assets in a revocable trust if they were transferred into the trust after May 1, 2002.1 The planning tools that shield these assets in probate-only states do not reliably protect them in Indiana. Because exactly which non-probate assets are reached turns on how each asset is titled and when it was transferred, families with significant non-probate assets should consult an elder-law attorney before assuming any asset is safe.

Pre-death liens. Estate recovery runs after death, but federal law at 42 USC Section 1396p(a) separately permits, and does not require, a state to place a lien on a recipient's home during life. That permission is narrow: it reaches the real property of someone who is an inpatient in a nursing facility or other medical institution and whom the state has determined, after notice and an opportunity for a hearing, cannot reasonably be expected to be discharged and return home.1 Whether FSSA has actually placed a lien on a particular house is a question to put to FSSA's estate recovery program at 877-267-0013, and one to raise with an Indiana elder-law attorney before any sale or transfer of the home.

Who Is Protected from Indiana Medicaid Estate Recovery?

Federal law at 42 USC Section 1396p(b)(2) creates mandatory categorical protections that block recovery in defined family situations. Indiana must honor all of them.1

Recovery cannot proceed while any of the following are true:

• A surviving spouse is alive. Recovery is deferred while the spouse lives. Recovery may potentially be sought from the spouse's estate later if identifiable property from the Medicaid recipient passes to the spouse and remains in the estate at the spouse's death. Families with surviving spouses and significant real property should consult an attorney about planning during the spouse's lifetime.
• A child under age 21 is alive. Recovery is fully blocked until the child's 21st birthday.
• A child of any age who is blind or permanently and totally disabled (under the SSI disability standard at 42 USC Section 1382c) is alive.

Two additional home-specific protections apply:

• A sibling with an equity interest who lived in the home for at least one year before the recipient was institutionalized and has lived there continuously since the institutionalization.
• A caregiver child (any age) who lived in the home for at least two years before institutionalization, provided care during those two years that delayed or prevented institutionalization, and has continued living in the home since.

These protections must be affirmatively asserted and documented by the estate administrator during the recovery process. They are not applied automatically. The caregiver child protection for estate recovery is also legally distinct from the caregiver child lifetime transfer exception under 42 USC Section 1396p(c)(2)(A)(iv), which applies to the eligibility look-back period rather than post-death recovery.1

How to Claim a Hardship Waiver

Federal law at 42 USC Section 1396p(b)(3) requires Indiana to maintain a hardship waiver process. When estate recovery would cause undue hardship for the surviving household, the estate administrator can apply for a waiver to reduce or eliminate the recovery claim.1

The CMS State Medicaid Manual Section 3810.C identifies three categories of qualifying hardship:

1. The asset is the sole income-producing asset. If the primary estate asset is the sole source of income for the surviving family, recovery can be waived to protect that income stream.
2. The asset is a homestead of modest value. Recovery against a modest family home can be waived when the loss would cause genuine financial hardship for heirs who depend on it.
3. Other compelling circumstances. Indiana may recognize additional hardship situations beyond these baseline categories.

To apply, the estate administrator should contact FSSA OMPP's Medicaid Estate Recovery program in writing, explain the specific hardship circumstances, and attach supporting documentation (proof of income, property valuations, family circumstances). FSSA will review the application and issue a determination. If the waiver is denied, the estate administrator has the right to request a fair hearing.

Documentation quality matters in waiver applications. A well-prepared submission that clearly establishes the statutory hardship ground, with supporting evidence, gives the waiver the best chance. Legal assistance from an elder-law attorney is worth considering for complex situations.

How to Respond If You Receive a Claim

When an Indiana Medicaid recipient dies, FSSA's estate recovery program will typically learn of the death through state records. The estate administrator or executor should contact FSSA proactively to understand whether a recovery claim exists before distributions are made to heirs.

Two Indiana rules shape what happens next. Beginning July 1, 2025, the State has nine months from the decedent's date of death to file its claim, and that time limit does not apply to assets that were not reported to the county office of FSSA's Division of Family Resources. When the State does have a claim, the claim carries preferred status, meaning it is paid in full before other debts are paid or distributions are made to the heirs.1

Steps for the estate administrator:

Probate should not close until FSSA's recovery position is settled. Distributing assets to heirs before a recovery claim is resolved can create liability for the estate administrator personally.

Learn More

Find personalized help understanding Indiana Medicaid estate recovery at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.