Indiana Medicaid pays for nursing home care once Medicare's short rehabilitation window runs out. If a parent has been admitted to a facility and the monthly bill runs into the thousands with no end in sight, this is the program that covers long-term custodial care.

This guide walks through how Indiana Medicaid nursing home coverage works in 2026: who qualifies medically and financially, why Indiana's income cap can require a Miller Trust, what you keep versus what goes to the facility each month, how the at-home spouse is protected, and how estate recovery affects the family home.

In This Guide

Does Indiana Medicaid Pay for Nursing Home Care?

It does. Medicaid is the only public program that pays for long-term custodial nursing home care in any meaningful way, and in Indiana it runs through the Indiana Family and Social Services Administration (FSSA), with eligibility processed by its Division of Family Resources (DFR). Medicare covers up to 100 days of skilled nursing care after a qualifying hospital stay, and then it stops. The custodial care that most nursing home residents need long-term, the daily help with bathing, dressing, eating, and moving, is not something Medicare pays for. That is the gap Indiana Medicaid fills.

For a resident who qualifies, Medicaid pays the nursing facility directly for covered care. The resident contributes most of their own income (the share of cost, explained below), and Medicaid covers the difference up to the facility's Medicaid rate. One Indiana-specific wrinkle: since July 1, 2024, long-term services and supports for members aged 60 and older are delivered through Indiana PathWays for Aging, the state's managed-care program. A PathWays health plan coordinates the nursing-facility benefit, but the underlying Medicaid eligibility rules are the same.

What Indiana Medicaid pays for inside the facility:

  • Room and board.
  • Nursing care and help with daily activities.
  • Prescription drugs and medical supplies under the daily rate.
  • Physician services and therapies covered by the facility benefit.

To get there, an applicant has to clear two separate tests: a medical one and a financial one.

Indiana Medicaid Nursing Home Medical Eligibility (Level of Care)

Before Indiana Medicaid pays for a nursing home, the resident has to need that level of care. The state uses a level-of-care determination to confirm the person requires the kind of skilled or custodial care a nursing facility provides, rather than care that could safely be delivered at home or in assisted living.

In practice, this means the resident needs ongoing nursing supervision or hands-on help with several activities of daily living, things like transferring in and out of bed, toileting, eating, and managing medications. A physician documents the need, and the facility's admission process and the resident's medical records support it. Most older adults entering a nursing home directly from a hospital, after a stroke, a serious fall, or advancing dementia, clear this bar without difficulty.

If the person's needs are real but could be met at home, the better fit may be one of Indiana's home- and community-based waiver services delivered through PathWays for Aging rather than institutional care. Those services apply the same spousal protections discussed below, which is worth knowing before you assume a nursing home is the only path.

Financial Eligibility: Assets and Income

This is where most families get stuck, and where Indiana's income-cap structure matters most.

The asset limit

A single nursing-home or waiver applicant is limited to $2,000 in countable assets in 2026; a married couple with both spouses applying is limited to $3,000. Some assets do not count toward that limit:

Indiana applies a 60-month (five-year) look-back to uncompensated asset transfers, so gifts or below-market transfers made in the five years before applying can create a penalty period during which Medicaid will not pay for care. That federal look-back rule is why early planning matters.,

The income cap and the Miller Trust

For nursing-facility coverage, Indiana sets the income limit at $2,982 per month in 2026, equal to 300% of the 2026 Supplemental Security Income (SSI) Federal Benefit Rate of $994.

Here is where Indiana differs from medically needy states like Wisconsin and Minnesota. Indiana is a strict income-cap state and does not offer a spend-down for long-term-care applicants. If your gross monthly income is over $2,982, you do not simply pay more toward care to qualify. Instead, you must establish a Qualified Income Trust, commonly called a Miller Trust, and deposit the excess income into it each month so it does not count against the cap. The trust funds then go toward your cost of care under specific rules. Setting one up usually means a short consultation with an elder-law attorney, and it has to be done correctly, so this is a step worth getting right the first time.

For a full walk-through of the income standards and exempt assets, see Indiana Medicaid eligibility and income limits.

What You Pay: Share of Cost (Patient Liability)

Once a resident is approved, the question becomes how much of their income goes to the facility each month. Indiana calls the resident's contribution the patient liability, or share of cost, and the math runs in a fixed order.

Start with the resident's gross monthly income. Subtract, in order:

  1. The personal needs allowance, $52 per month in Indiana, which the resident keeps for personal expenses like haircuts, clothing, and toiletries. This sits well above the federal floor, which sets the institutional personal needs allowance at no less than $30 per month.,
  2. Health insurance premiums, including the Medicare Part B premium and any Medigap premium.
  3. A monthly maintenance allowance for an at-home spouse, if there is one (covered in the next section).

Whatever remains is the share of cost the resident pays the facility each month. Medicaid covers the rest of the facility's Medicaid rate. The resident is never left without the $52 set aside for personal needs.

Protecting the At-Home Spouse

When one spouse enters a nursing home and the other stays in the community, federal spousal-impoverishment rules keep the at-home spouse from being left without enough to live on. Indiana applies these protections.

Two protections do the heavy lifting:

  • The Community Spouse Resource Allowance (CSRA) lets the at-home spouse keep up to half the couple's countable assets, up to a 2026 maximum of $162,660 (minimum $32,532). This is separate from the institutionalized spouse's $2,000 limit.,
  • The Minimum Monthly Maintenance Needs Allowance (MMMNA) lets income shift from the nursing-home spouse to the at-home spouse, bringing the at-home spouse's income up to a 2026 floor that ranges from $2,705.00 to $4,066.50 per month, depending on housing costs.

Because the asset snapshot and the housing-cost calculation get technical fast, and because the difference can run into six figures, this is one area where it pays to get the numbers right. See Indiana spousal impoverishment protections for the full framework.

Estate Recovery After Nursing Home Care

After a Medicaid recipient who received long-term care dies, federal law (the Omnibus Budget Reconciliation Act of 1993) requires the state to seek recovery of what it spent from the person's estate. Indiana pursues this recovery for recipients who were 55 or older when they received long-term-care services.,

A few federal protections limit how and when recovery happens:

  • There is no recovery while a surviving spouse is living.
  • Recovery is deferred while a surviving child under 21, or a child of any age who is blind or permanently and totally disabled, is living.
  • An undue-hardship waiver is available where recovery would create real hardship for survivors.

The home is an exempt asset while the resident is alive, but it can be subject to a claim against the estate after death. Because the rules around the home, probate, and hardship waivers get detailed, this is a planning conversation worth having with an elder-law attorney before a parent enters a facility. For the full mechanics, see Indiana Medicaid estate recovery.

How to Find an Indiana Medicaid Nursing Home

Most nursing homes in Indiana are certified to accept Medicaid, but quality varies widely, and that is the choice that matters most. Two free tools should drive it: Medicare Care Compare, the federal five-star rating site, and the Indiana Long-Term Care Ombudsman program, which places resident advocates across the state.

Medicare Care Compare Five-star ratings for every Medicare- or Medicaid-certified nursing facility, with separate stars for health inspections, staffing, and quality measures. The site also flags Special Focus Facilities, homes with a documented pattern of serious problems. Search by ZIP code. www.medicare.gov/care-compare
Indiana Long-Term Care Ombudsman State advocates who can tell you about a specific facility's track record before admission, often things a survey report does not show. www.in.gov/ombudsman/long-term-care-ombudsman/overview

Questions worth asking any facility you are considering:

  • How many Medicaid beds do you currently have open?
  • What is your current five-star rating, and have you had deficiencies in the past year?
  • What is your staffing ratio on day, evening, and overnight shifts?
  • Will you accept a "Medicaid pending" admission, and how do you bill during the application period?

When you are ready to apply, start with how to apply for Indiana Medicaid for the application channels, the document checklist, and what to gather before you call.

Your next step Apply for Indiana Medicaid through the FSSA Benefits Portal or call the FSSA Division of Family Resources at 1-800-403-0864.

Frequently Asked Questions

Does Indiana Medicaid pay for nursing home care?

Yes. Indiana Medicaid pays for long-term nursing facility care for residents who need a nursing-facility level of care and meet the financial limits. It covers room, board, nursing, personal care, and prescriptions under the facility's daily rate. Medicare only covers short-term skilled care after a hospital stay, up to 100 days, and does not cover long-term custodial care.

What is the income limit for Indiana nursing home Medicaid?

The nursing-facility income cap is $2,982 per month in 2026, equal to 300% of the SSI Federal Benefit Rate. Indiana is an income-cap state, so an applicant over the cap must set up a Qualified Income Trust, also called a Miller Trust, rather than using a spend-down.

What is a Miller Trust and do I need one in Indiana?

A Miller Trust, or Qualified Income Trust, is a special account that holds the income above Indiana's $2,982 cap so it does not count toward eligibility. Because Indiana has no long-term-care spend-down, an applicant whose gross income exceeds the cap needs one to qualify. An elder-law attorney typically sets it up.

How much of my income do I keep in an Indiana nursing home?

You keep a personal needs allowance of $52 per month in Indiana, plus deductions for your Medicare and other health insurance premiums and, if you are married, a maintenance allowance for an at-home spouse. The remainder is your share of cost, paid to the facility. Medicaid covers the rest of the facility's rate.

Can my spouse keep our assets if I go into a nursing home?

Yes, within limits. The at-home spouse can keep countable assets up to $162,660 in 2026 under the Community Spouse Resource Allowance, plus income up to a maintenance floor between $2,705.00 and $4,066.50 per month. These protections are separate from the nursing-home spouse's $2,000 asset limit.,

Learn More

MedicaidNursing Home Medicaid by State: Coverage, Eligibility, and CostMedicaid pays for nursing-home care in every state, but the income cap, level-of-care test, and rules vary. The federal floor, what changes, and your state. 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. MedicaidIndiana Spousal Impoverishment ProtectionsIndiana Medicaid spousal impoverishment 2026: CSRA protects up to $162,660 in assets; MMMNA protects income. How FSSA applies the rules and PathWays for Aging. MedicaidIndiana Medicaid Estate RecoveryIndiana Medicaid estate recovery applies after death to LTC recipients 55+. Learn who's protected, what assets are at risk, and how to respond to an FSSA claim.

Find personalized help mapping an Indiana Medicaid nursing home application 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.