Indiana Medicaid Nursing Home: Who Qualifies, What You Pay

When a parent has moved into a nursing home for good, Indiana Medicaid is what pays for the long-term custodial care that Medicare doesn't cover.1

To get Indiana Medicaid nursing home coverage, a resident has to pass two separate tests, a medical one and a financial one, and a resident 60 or older will generally have that care run through one of three Indiana PathWays for Aging health plans.2,3,4

In This Guide

• The Short Answer
• Does Indiana Medicaid Pay for Nursing Home Care?
• Medical Eligibility (Level of Care)
• Who Qualifies Financially for Indiana Nursing Home Medicaid?
• What You Pay: Share of Cost
• Protecting the At-Home Spouse
• Estate Recovery After Nursing Home Care
• How to Find an Indiana Medicaid Nursing Home
• Frequently Asked Questions
• Learn More

Does Indiana Medicaid Pay for Nursing Home Care?

It does. Medicare covers skilled nursing facility care for up to 100 days in each benefit period after a qualifying hospital stay, but it doesn't pay for long-term care. Custodial care, the daily help with bathing, dressing, and using the bathroom, is not something Medicare pays for.1 That is the gap Medicaid fills. In Indiana it runs through the Indiana Family and Social Services Administration (FSSA), with eligibility processed by its Division of Family Resources (DFR).3

For a resident who qualifies, the resident contributes most of their own income (the share of cost, explained below), and Medicaid covers the rest of the nursing home cost.3 One Indiana-specific wrinkle: Indiana PathWays for Aging, the managed-care program FSSA announced for a July 2024 launch, serves Medicaid members aged 60 and older in a full-coverage aged, blind, or disabled category, including people living in a nursing facility. So a resident who is 60 or older will generally have their care run through one of its three health plans: Anthem Blue Cross and Blue Shield, Humana Healthy Horizons, or UnitedHealthcare Community Plan of Indiana.4

The medical test comes first.

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. Indiana decides this with a nursing facility level of care (NF LOC) determination. Maximus, the state's Level of Care Assessment Representative (LCAR) contractor, makes the NF LOC determinations for nursing facility admission, and FSSA does a final review of every recommendation.2

Indiana's criteria are in its administrative code at 405 IAC 1-3. The resident needs either skilled nursing services, ordered by a physician and needed daily, essentially seven days a week, or intermediate care: care for a relatively stable long-term illness or disability with professional supervision for safety and help with some combination of walking, transfers, bathing, eating, dressing, or toileting. Room, food, laundry, and supervision of daily activities do not qualify on their own, and Medicaid does not pay for care below the intermediate level.6

Who completes the assessment itself depends on where the person is. A hospital can still complete it for an inpatient seeking nursing facility placement, and a PathWays health plan submits assessment data for its own members. Nursing facilities completed their residents' assessments through the end of 2025; since Jan. 1, 2026, a facility asks Maximus to do a new one. In every case the information goes to Maximus for review and the decision, and the determination rests on the interRAI suite of assessment tools.2,7

A potential denial is not final right away. A Maximus physician reviews it first, and if the physician upholds it, FSSA's Division of Aging reviews the assessment and decides. Every level-of-care outcome letter includes a notice of your right to appeal and information on the appeals process.7

The same NF LOC determination decides eligibility for the PathWays for Aging waiver, so if the person's needs could be met at home, the better fit may be one of Indiana's home- and community-based waiver services rather than institutional care.2,4

Who Qualifies Financially for Indiana Nursing Home Medicaid?

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

The asset limit

An aged, blind, or disabled applicant is limited to $2,000 in countable assets in 2026, or $3,000 for a married couple. When only one spouse is in the nursing home, that spouse is held to the $2,000 limit, and the at-home spouse is protected separately (see below).3 Some assets do not count toward that limit:

• The primary residence, exempt if a spouse, a child under 18, or a blind or disabled child lives there, or if the applicant is expected to return home. Indiana applies the substantial-home-equity bar at the federal floor rather than electing a higher figure, so equity above $752,000 in 2026 blocks long-term-care coverage unless a spouse, a child under 21, or a blind or disabled child lawfully lives in the home. Equity over the limit can be reduced with a reverse mortgage or home equity loan, federal law requires a hardship waiver process, and Indiana exempts Indiana Partnership long-term-care policyholders from the bar.3,8
• One vehicle of any value if it is used for the applicant's employment or medical treatment, modified for a disability, or used by the at-home spouse. Any other vehicle is exempt only up to $5,000 of current market value.3
• Household goods and personal effects, not counting collections.3
• Burial spaces, and an irrevocable burial or funeral trust tied to specific funeral or burial services.3

Indiana applies the federal 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 nursing-home care or home- and community-based waiver services. The rest of the person's Medicaid coverage continues. Not every transfer is penalized: transfers to a spouse, to a blind or disabled child, or into a trust for a disabled person under 65 are exempt, as is a home passed to certain relatives, and a hardship waiver is available where the penalty would endanger health or life. That federal look-back rule is why early planning matters.8,3

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 $994.3,9

This is where Indiana's income cap bites. Indiana is an income-cap state for long-term care: FSSA says an applicant whose income exceeds the Special Income Level "will no longer be eligible for Medicaid unless the individual has a valid Miller trust." So if your monthly income is over $2,982, Indiana won't find you eligible unless you have a valid Qualified Income Trust, commonly called a Miller Trust.3 Federal law lets that kind of trust hold only your income, such as a pension or Social Security, and requires that whatever remains in it when you die go to the state, up to what Medicaid paid for your care.5 Indiana's rule spells out what a valid trust requires: it must be funded at least every month with the amount of your monthly income above the $2,982 cap, and its money must sit in a separate account, not mixed with any other account.10 The same rule lists what the trust may pay out: a monthly personal needs allowance if all of your income goes into the trust, an amount to your spouse that brings them up to, but not over, the minimum monthly maintenance allowance, your incurred medical expenses, and the cost of your care, such as your patient liability.10 An elder-law attorney can set one up, and it 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 of income toward care the resident's liability, often called patient liability or share of cost.3

Start with the resident's monthly income. Federal rules list the deductions in this order:

1. The personal needs allowance, which the resident keeps for personal expenses. Indiana sets it at $52 a month, and its Medicaid policy manual makes that the minimum for every resident of a Medicaid-certified long-term care facility its rules cover, single or married, with an added amount in specific situations. That is above the federal floor of $30 a month.3,11
2. A monthly maintenance allowance for an at-home spouse, if there is one (covered in the next section), and an allowance for other family at home.11
3. Health insurance premiums, including the Medicare Part B premium and any Medigap premium, and medical expenses Medicaid doesn't cover. Indiana's list also includes taxes.11,3

Whatever remains is the share of cost the resident pays the facility each month. Medicaid covers the rest of the nursing home cost. The resident is never left without the $52 set aside for personal needs. Someone getting care at home through a waiver is treated differently: Indiana sets their personal needs allowance at the $2,982 Special Income Level.3

Worked example #1: A widowed resident has $1,900 a month in Social Security and pension income, which is under the $2,982 cap, so she needs no Miller Trust. She also pays $150 a month for a private health insurance policy. Her share of cost is $1,900 minus the $52 personal needs allowance and the $150 premium, or $1,698 a month, paid to the nursing home. Medicaid covers the rest.3

Worked example #2: A married resident has $2,600 a month in income, and his wife at home has $1,200 a month in her own name. Indiana lets her keep enough of his income to reach the $2,705 minimum, so $1,505 of his income goes to her (more on appeal if her living expenses are high). His share of cost is $2,600 minus the $52 allowance and the $1,505, or $1,043 a month, before any health insurance premiums.3,12,11

The figures above are hypothetical and shown only to illustrate how the calculation works. They are not a real case and not a prediction of your own result.

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.12,3

They are not limited to nursing homes. Indiana's spousal-impoverishment page says they also reach in-home and community care under the Medicaid Aged and Disabled Waiver. That waiver no longer exists under that name: on July 1, 2024 it split into the Health and Wellness Waiver for people 59 and under and the PathWays for Aging Waiver for people 60 and older. If one spouse would get waiver services at home instead, confirm with DFR how the protections apply.3,13

Two protections do the heavy lifting:

• The Community Spouse Resource Allowance (CSRA) lets the at-home spouse keep half the couple's countable assets, with a 2026 minimum of $32,532 and a standard maximum of $162,660. A fair hearing or a court order can set a higher amount. Indiana's spousal-impoverishment page describes an appeal for income but not for resources, so ask DFR how to request a resource hearing. This allowance is separate from the nursing-home spouse's $2,000 limit.12,3 Indiana requires a Medicaid appeal to be made in writing, using the contact information on the notice you are disputing.14
• The Minimum Monthly Maintenance Needs Allowance (MMMNA) lets income shift from the nursing-home spouse so the at-home spouse reaches at least $2,705.00 a month, the figure in effect from July 1, 2026.12 If the at-home spouse's living expenses are high, an appeal can raise that to the 2026 maximum of $4,066.50 a month (Indiana rounds it to $4,067), and a fair hearing that finds exceptional circumstances can set it higher still.3,12

Because the asset snapshot and the housing-cost calculation get technical fast, and because the resource allowance alone can reach $162,660, this is one area where it pays to get the numbers right.12 See Indiana spousal impoverishment protections for the full framework.

Estate Recovery After Nursing Home Care

Federal law (the Omnibus Budget Reconciliation Act of 1993) bars a state from recovering Medicaid that was correctly paid, except in set cases. One of them requires the state to seek repayment from the estate of a recipient who was 55 or older when they received nursing-facility care, home- and community-based services, and related hospital and prescription drug services.5 Indiana's Medicaid Estate Recovery Program seeks the total amount Medicaid paid on a recipient's behalf after they turned 55, and in certain other limited circumstances, so the claim is not necessarily limited to nursing-home costs.3

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.5

Indiana's own estate-recovery page puts the first two protections in its own terms: it lists all of a recipient's assets as unrecoverable so long as the recipient is survived by a spouse, a child under 21, or a blind or disabled child. An Indiana undue-hardship waiver application must be submitted within 90 days of the date of the claim, and you can request one by phone at 877-267-0013.3

The home can be an exempt asset while the resident is alive, but Indiana says a recipient's house may be subject to estate recovery after death, including a house passed to someone through joint tenancy with right of survivorship created after June 30, 2002.3 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

Choosing the home is the decision that matters most, and two free tools should drive it: Medicare Care Compare, the federal five-star rating site, and the Indiana Long-Term Care Ombudsman program, whose certified ombudsmen advocate for nursing-home residents and their families, free and confidentially.15

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. Once DFR has a complete application, a decision can take up to 90 days, so start early if a parent is already in a facility.3

Learn More

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.