Indiana Medicaid estate recovery lets the state claim, after a recipient's death, what Medicaid paid for their care from age 55 on. 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 recipient dies, FSSA seeks the total amount Medicaid paid on their behalf after they turned 55, and in certain other limited circumstances. 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. FSSA cannot recover any of a recipient's assets while the recipient is survived by a spouse, a child under 21, or a child who is blind or disabled, and the State will not seek recovery where it would cause substantial and undue hardship for the surviving beneficiaries.

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. Federal law enacted by OBRA 1993, codified at 42 USC Section 1396p(b), requires every state to seek recovery of certain Medicaid assistance from the estates of deceased recipients.

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.

That is the federal floor, not the ceiling. Federal law also lets a state, at its option, recover for any other items or services under its State plan. Indiana's program does not stop at long-term care: FSSA 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. So do not assume that a parent who never needed long-term care leaves nothing for FSSA to claim.

In Indiana, long-term services and supports (LTSS) are 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.

Indiana is an income-cap state, which means applicants whose 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 federal carve-out is narrower than it is often described. Under 42 USC Section 1396p(b)(1)(B)(ii), a state's optional recovery of other State-plan items and services does not include Medicaid payments for Medicare cost-sharing on behalf of Medicare Savings Program enrollees. That carve-out does not reach the mandatory category: nursing facility services, HCBS, and related hospital and prescription drug services remain subject to recovery, so it is not a general exclusion of Medicare Savings Program enrollees from estate recovery and does not put a home beyond reach.

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, at its option, define "estate" broadly enough to reach property that passes outside probate, including assets conveyed to a survivor through joint tenancy, survivorship, a life estate, a living trust, or another arrangement. FSSA's estate recovery program uses that broader definition: it 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.

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 names some of the types of assets it can recover, and says the list is not complete: real property conveyed to a survivor through joint tenancy with right of survivorship (if the joint tenancy was created after June 30, 2002), money left in the recipient's bank account even if the account has a payable-on-death provision or a joint owner, money left in a nursing home account, funds remaining in a Qualified Income Trust (Miller Trust) as of the date of death, funds left in a funeral trust after the funeral is paid in full, 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.

FSSA also publishes a list of assets that cannot be recovered: the proceeds of a life insurance policy that names a beneficiary; real property subject to a life estate; non-probate assets transferred out of the probate estate before May 1, 2002; the sum due from an annuity purchased before May 1, 2005; personal effects, ornaments, or keepsakes; and assets protected by an Indiana Partnership Long Term Care Insurance Policy. FSSA says these "may include", so treat the list as a guide rather than a guarantee.

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. No such lien may be placed on the home while the recipient's spouse, a child under 21 or blind or permanently and totally disabled, or a sibling with an equity interest who lived there for at least a year before the admission is lawfully living in it, and a lien dissolves if the recipient is discharged and returns home. Whether FSSA has actually placed a lien on a particular house is a question to put to FSSA in writing, 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.

Recovery cannot proceed while any of the following are true:

  • A surviving spouse is alive. Federal law allows recovery only after the surviving spouse's death, so families with a surviving spouse 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 is alive.

FSSA states the same rule from Indiana's side: none of a recipient's assets can be recovered so long as the recipient is survived by a spouse, a child under 21, or a child who is blind or disabled.

Two further protections apply to a narrower case: a home that carried a pre-death lien under 42 USC Section 1396p(a)(1)(B) (see "Pre-death liens" above). For a home with that lien, recovery must wait while either of these people is lawfully living there and has lived there continuously since the recipient's admission:

  • A sibling who lived in the home for at least one year immediately before the recipient's admission to the medical institution. Unlike the lien bar during life, this after-death protection does not require the sibling to hold an equity interest.
  • A caregiver child who lived in the home for at least two years immediately before the admission and establishes to the State's satisfaction that their care let the parent live at home rather than in an institution.

Under federal law these two are conditions on recovery against a home that carried that lien, not a general bar on recovery against every home. Whether Indiana extends similar protection to a home with no lien is a question of Indiana law, so check with FSSA and an elder-law attorney before relying on it. 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 every state to set up procedures to waive recovery when it would work an undue hardship. Indiana's version: the State will not seek recovery if it would result in a substantial and undue hardship for the surviving beneficiaries of the decedent's estate.

HHS reports that states have considerable discretion in how they define hardship, and that federal guidelines point to two kinds of property:

  1. A homestead of modest value.
  2. Income-producing property, such as a farm or family business, that is essential to the support of surviving family members.

Indiana also sets who can apply and when. A surviving beneficiary who is an immediate family member will have their application considered, and in exceptional circumstances FSSA will also consider one from a family member who is not immediate. Request the application by phone at 877-267-0013 or by email at EstateRecovery@fssa.in.gov. It must be submitted within 90 days of the date of the claim, a deadline that runs from the claim, not from the death. If FSSA denies the waiver, ask FSSA in writing how to contest the decision and talk with an elder-law attorney promptly.

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

The estate administrator or executor should contact FSSA proactively to understand whether a recovery claim exists before distributions are made to heirs.

Several Indiana rules shape what happens next.

  • The filing window has an exception. Beginning July 1, 2025, the State has nine months from the decedent's date of death to file its claim. That limit does not apply to assets not reported to the county office of FSSA's Division of Family Resources, which FSSA says can include property passed by a Transfer on Death deed or another transfer made during the recipient's life while on Medicaid, or after death outside the probate estate. A Transfer on Death deed beneficiary cannot count on the nine months running out.
  • The State's claim comes first, but not before everything. The claim is to be paid in full before other debts are paid or distributions are made to heirs. FSSA itself answers "Yes and no," though: expenses of administration, funeral and cemetery expenses up to $3,500, and possibly certain expenses of the recipient's last illness may be paid before the State's claim. Money remaining in a Miller Trust cannot be used to pay them.
  • The amount can keep rising after death. Medicaid providers generally have 180 days from the date of death to bill, so ask FSSA for a current figure before paying.
  • The hardship clock starts with the claim. A hardship waiver application must be submitted within 90 days of the date of the claim.
FSSA Medicaid Estate Recovery Program Email: EstateRecovery@fssa.in.gov The program page explains what FSSA can and cannot recover. FSSA gives the phone number and email above as where to request the undue hardship waiver application. 877-267-0013 in.gov/fssa/ompp/medicaid-estate-recovery
FSSA Division of Family Resources Processes Indiana Medicaid applications and answers application-status questions. For general questions about healthcare benefits, Indiana Medicaid Member Services is 1-800-457-4584. 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 an estate inventory

Assemble the assets and their values so FSSA can assess whether a claim applies and for how much. In Indiana that inventory should not stop at the probate assets, since the recoverable estate also reaches property conveyed through a non-probate transfer.

3
Step 3

Tell FSSA about any surviving spouse or protected child

If a surviving spouse, child under 21, or blind or disabled child is alive, FSSA cannot recover any of the recipient's assets, so tell FSSA in writing and keep records that show it.

4
Step 4

Document a sibling or caregiver-child protection

If the home carried a pre-death lien and a sibling or caregiver child still lives there, gather the residency history and, for a caregiver child, evidence of the care provided, since that child must establish it to the State's satisfaction.

5
Step 5

Apply for a hardship waiver if it fits

Request the application at 877-267-0013 or EstateRecovery@fssa.in.gov and submit it within 90 days of the date of the claim, with documentation of the hardship (income, property values, family circumstances).

6
Step 6

Verify the claim's scope

FSSA seeks the total amount Medicaid paid on behalf of the recipient after they turned 55, so check the claim against that period rather than assuming it is limited to nursing-home bills, and ask for a current figure before paying. Ask too whether it includes any Medicare Savings Program cost-sharing, which federal law leaves out of a state's optional recovery of other State-plan services.

7
Step 7

Raise any disagreement in writing

If you contest the claim amount or a waiver denial, put it to FSSA in writing promptly and talk with an elder-law attorney about your options.

Probate should not close until FSSA's recovery position is settled. Talk with an Indiana probate or elder-law attorney before distributing assets to heirs while a recovery claim may still be pending.

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 whose recoverable estate reaches non-probate assets, 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 none of the recipient's assets can be recovered while they are survived by a spouse, a child under 21, or a child who is blind or disabled, and FSSA lists real property subject to a life estate among the assets it cannot recover. If none of those protections fit, FSSA may pursue recovery up to the total amount Medicaid paid on the recipient's behalf after age 55. If the home carried a pre-death lien, a sibling or caregiver child still living there can also delay recovery against it. 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. Federal law makes home and community-based services recoverable for a recipient who was 55 or older, just like nursing facility services. And Indiana's claim is not limited to long-term care in either setting: FSSA seeks the total amount Medicaid paid on the recipient's behalf after they turned 55. Whether care was provided in a nursing facility or at home does not change the answer.

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, and that money left in the trust cannot be used to pay funeral or administration expenses ahead of the State's claim. 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?

Do not assume the answer either way. Federal law at 42 USC Section 1396p(a) permits a state to place a lien on the home during life, but it does not require one, and the 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. Even then, no lien may be placed on the home while the recipient's spouse, a child under 21 or blind or permanently and totally disabled, or a sibling with an equity interest who lived there for at least a year before the admission is lawfully living in it, and any lien dissolves if the recipient is discharged and returns home. To find out whether a lien exists on a specific property, ask FSSA in writing, and have an Indiana elder-law attorney check the county records before you sell or transfer the home.

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 uncompensated asset transfers over a five-year look-back period and can create a penalty that starts from the date of Medicaid eligibility and delays coverage. Estate recovery applies after the recipient's death: it seeks repayment from the estate for what Medicaid paid. In Indiana that estate is not just the probate estate, because FSSA's definition also reaches property conveyed through a non-probate transfer. So a planning step that keeps an asset out of probate does not by itself keep it out of recovery here, and each rule requires its own analysis with an Indiana elder-law attorney.

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

The State will not seek recovery if it would result in a substantial and undue hardship for the surviving beneficiaries of the estate. A surviving beneficiary who is an immediate family member will have their application considered, and in exceptional circumstances FSSA will consider one from another family member. Request the application at 877-267-0013 or EstateRecovery@fssa.in.gov, and submit it within 90 days of the date of the claim. Federal guidelines point to homesteads of modest value and to income-producing property, such as farms or family businesses, that surviving family members depend on.

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 LimitsIndiana's 2026 Medicaid income cap for nursing-home care is $2,982/month and the asset limit is $2,000. Over the cap? You need a Miller Trust. Here's how. MedicaidHow to Apply for Indiana MedicaidApply for Indiana Medicaid online, in person at a local DFR office, by mail, or by phone, plus Miller Trust rules, documents, timelines, and appeals. MedicaidMedicaid Estate Recovery ExplainedMedicaid estate recovery can claim a home after death, but not while a spouse or a child under 21, blind or disabled survives. See your state's rules.

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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