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: under Indiana Code 12-15-9-0.5, its definition of a recipient's "estate" includes non-probate assets conveyed through a non-probate transfer, so recovery can reach beyond the probate estate to some assets that pass outside it. 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.

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.

The recovery program targets long-term services and supports (LTSS), not the full range of Medicaid benefits. A person who received standard Medicaid medical coverage without LTSS is not subject to estate recovery. The age threshold also matters: someone who received nursing facility care before turning 55 is not subject to recovery, even if they later received more care after 55.

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 July 1, 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.

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. 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. 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. Indiana Code 12-15-9-0.5 defines a recipient's recoverable estate to include not only probate assets but also real property conveyed to a survivor through joint tenancy with right of survivorship created after June 30, 2002, any property conveyed through a non-probate transfer, and certain post-2005 annuity payments. 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.

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. 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.

TEFRA liens. Federal law at 42 USC Section 1396p(a) permits states to file pre-death liens against the homes of permanently institutionalized Medicaid recipients. If FSSA has filed a lien, it will appear on a title search and must be satisfied before the property can be sold or transferred. The lien does not force a sale during the recipient's lifetime. Federal protections require that the lien be released if a surviving spouse, minor child, blind or disabled child, or a sibling with an equity interest and residency history is present.

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.

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.

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.

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.

FSSA Medicaid Estate Recovery Program Handles estate recovery claims after a recipient's death, including hardship waiver requests and fair-hearing appeals. 877-267-0013 in.gov/fssa/ompp/medicaid-estate-recovery
FSSA General Medicaid Line Answers general Indiana Medicaid questions and manages the Benefits Portal for applications and case information. 1-800-403-0864 fssabenefits.in.gov

Steps for the estate administrator:

1
Step 1

Notify FSSA of the death

Contact FSSA's estate recovery program to report the death and request information about any outstanding recovery claim before distributing assets to heirs.

2
Step 2

Compile a probate inventory

Assemble an inventory of the probate assets and their values so FSSA can assess whether a claim applies and for how much.

3
Step 3

Assert any mandatory protection

If a surviving spouse, child under 21, or blind or permanently disabled child is alive, document and assert that protection to FSSA in writing, since it is not applied automatically.

4
Step 4

Document a sibling or caregiver-child protection

If a sibling with an equity interest or a caregiver child qualifies, gather the residency history and evidence of the care provided to support the claim.

5
Step 5

Submit a hardship waiver if applicable

If recovery would cause undue hardship, submit a written waiver request with supporting documentation (proof of income, property valuations, family circumstances).

6
Step 6

Verify the claim's scope

Review any claim FSSA asserts to confirm it covers only qualifying LTSS paid for services received at age 55 or older, not Medicare Savings Program cost-sharing.

7
Step 7

Request a fair hearing if you disagree

If you contest the claim amount or a waiver denial, request a fair hearing within the deadline specified in the notice.

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.

Frequently Asked Questions

Will FSSA take my parent's house after they die?

It depends on whether any protections apply. FSSA may include the home in a recovery claim, and because Indiana is an expanded-estate state under Indiana Code 12-15-9-0.5, do not assume joint titling or a survivorship deed automatically keeps the home out of recovery. FSSA's program lists real property conveyed to a survivor through joint tenancy with right of survivorship among the assets it can reach. But recovery is completely blocked if a surviving spouse, a child under 21, or a blind or permanently disabled child is alive. The caregiver child and sibling protections can also apply to the home specifically. If none of those protections fit the situation, FSSA may pursue recovery up to the amount of Medicaid LTSS benefits paid. An elder-law attorney can tell you whether a given way of holding the home actually protects it in Indiana.

Does Indiana Medicaid estate recovery apply if my parent received home-based care rather than nursing home care?

Yes. HCBS services delivered through Indiana Medicaid waivers, including PathWays for Aging, also qualify as LTSS subject to recovery. The relevant question is whether qualifying long-term services and supports were received at age 55 or older, not whether those services were provided in a nursing facility or at home. Both settings count.

What if my parent had a Miller Trust? Does that affect estate recovery?

The Miller Trust (Qualified Income Trust) is an eligibility tool that allows Indiana's income-cap Medicaid applicants whose income exceeds the monthly limit to route the excess into a trust. FSSA's estate recovery program lists funds remaining in a Qualified Income Trust as of the date of death among the assets it can recover, so amounts left in the trust at death are generally subject to state Medicaid payback as part of the estate recovery process. The estate administrator should be aware that FSSA's recovery claim may include amounts from the trust as well as from the broader probate estate. An elder-law attorney can help the administrator understand the trust's terms and how payback interacts with the recovery claim.

Can FSSA put a lien on the house while my parent is still in a nursing home?

Yes, Indiana can file a TEFRA lien against the home of a permanently institutionalized recipient before death. The lien does not force a sale during the recipient's lifetime, but it encumbers the property. It will appear on a title search. The lien must be released if a qualifying protection applies (surviving spouse, minor child, disabled child, sibling with equity interest). If you believe a lien was filed in error or a protection applies, contact FSSA and consider legal assistance.

How does Indiana Medicaid estate recovery interact with the five-year look-back?

These are two separate rules that apply at different points in time. The look-back rule (at 42 USC Section 1396p(c)) applies before and during a Medicaid LTSS application: it reviews asset transfers made within 60 months before the application and can create a penalty period that delays eligibility. Estate recovery applies after the recipient's death: it seeks repayment from the probate estate for LTSS costs that Medicaid paid. Planning tools that reduce look-back exposure (like irrevocable Medicaid Asset Protection Trusts executed more than five years before application) can also reduce what passes through probate and is available for estate recovery. But each rule requires its own analysis.

What is Indiana's hardship waiver and how do we apply?

The hardship waiver allows FSSA to reduce or eliminate recovery when it would cause undue financial hardship for the surviving household. The core qualifying situations are when the primary estate asset is the family's sole income source, or when the home is modest and the family would face genuine hardship from losing it. The estate administrator applies by contacting FSSA in writing with supporting documentation. FSSA issues a determination, and the administrator can request a fair hearing if the waiver is denied.

Indiana Medicaid estate recovery has real rules and real protections. Brevy's care navigator can help you understand which protections apply to your family's situation and connect you with an elder-law attorney in Indiana.

Learn More

MedicaidIndiana Medicaid Eligibility and Income LimitsSee the 2026 Indiana Medicaid income limits and asset rules. Indiana is an income-cap state, so over-income applicants need a Miller Trust to qualify for care. MedicaidHow to Apply for Indiana MedicaidApply for Indiana Medicaid through the FSSA Benefits Portal, a local DFR office, or by phone, plus Miller Trust rules, documents, timelines, and appeals. MedicaidMedicaid Estate Recovery ExplainedMedicaid estate recovery explained: federal law, 51-state matrix, categorical protections, hardship waivers, and 2025-2026 reform updates. Verify before acting.

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.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.