Long-Term Care Medicaid in Indiana: 2026 Guide

In Indiana, Medicaid is run by the Family and Social Services Administration (FSSA), and eligibility is decided by FSSA’s Division of Family Resources (DFR). Since July 1, 2024, most Hoosiers 60 and older on Medicaid, including people who need long-term care, are enrolled in Indiana PathWays for Aging, a managed care program. Long-Term Care Medicaid can pay for nursing home care and for care at home through the PathWays waiver. This guide explains the 2026 rules in plain language.

At a glance: Indiana 2026 figures

Item	2026 figure
Income limit (applicant)	$2,982 a month (special income level). Higher income needs a Miller trust
Asset limit (single applicant)	$2,000
Asset limit (couple, both applying)	$3,000
Home equity limit	$752,000
Spouse at home: resource allowance (CSRA)	Minimum $32,532; otherwise half, up to $162,660
Spouse at home: monthly income allowance (MMMNA)	Minimum $2,705 (from July 1, 2026) / maximum $4,067
Personal needs allowance (nursing home)	$52 a month
Look-back period	60 months (5 years)
Penalty divisor	$8,027 a month (from July 1, 2026)

Figures last updated for 2026. Sources are listed at the end of this page.

Figures change periodically. Double-check current amounts with Indiana FSSA before relying on them.

What Long-Term Care Medicaid covers in Indiana

Nursing home care. Medicaid pays for care in a certified nursing facility. You pay most of your income toward the cost each month (your “liability”), and Medicaid pays the rest.

Indiana PathWays for Aging. PathWays is Indiana’s managed care program for Medicaid members 60 and older, including people in nursing homes and people who get long-term care at home. A PathWays health plan coordinates your care, and you can have Medicare at the same time.

The PathWays waiver (home and community-based services). On July 1, 2024, the old Aged and Disabled Waiver split in two: the PathWays for Aging Waiver for people 60 and older, and the Health and Wellness Waiver for people 59 and younger. To qualify, you must need a nursing facility level of care and have income no greater than 300% of the SSI amount. Services can include attendant care, home and community assistance, adult day services, adult family care, assisted living, home-delivered meals, home changes, respite, structured family caregiving and emergency response systems.

Waiting list. The waivers reached their federally approved number of slots in April 2024, and FSSA keeps a waiting list. FSSA sends invitations each month as slots open, with priority for people leaving a nursing facility or hospital. If you get an invitation, you must accept it within 45 days and complete all steps within 180 days, or it is withdrawn.

Assisted living. Medicaid does not pay room and board in assisted living. The PathWays waiver can pay for assisted living services in approved settings.

Who qualifies

A person generally must:

be 65 or older, or blind or disabled (PathWays covers people 60 and older);
live in Indiana and be a U.S. citizen or qualified non-citizen;
meet a nursing facility level of care. For waiver services, the assessment is done through the state’s assessment contractor, or by your PathWays health plan if you are already enrolled;
meet the income and asset rules below, as decided by DFR.

Income rules

Indiana is an income-cap state for long-term care. In 2026, the special income level is $2,982 a month.

If your income is above $2,982, you can still qualify by setting up a Miller trust (also called a Qualified Income Trust). Income above the cap is placed in the trust each month and used toward the cost of care. FSSA has a Miller trust page with its requirements.

Once you are on Medicaid in a nursing home, most of your income goes to the facility. You keep a personal needs allowance of $52 a month, and money can be set aside for a spouse at home and for health insurance premiums.

Asset rules

The state sources checked for this guide did not agree on one figure. For a couple who both need care, the limit is $3,000.

Countable assets include cash, bank accounts, CDs, stocks, bonds, mutual funds, retirement accounts that can be cashed in, life insurance cash value above set amounts and real estate other than the home.

Usually exempt:

Your home, if you live there or plan to return, or a spouse or dependent relative lives there
One vehicle
Household goods and personal belongings
Irrevocable funeral trusts and burial spaces, within FSSA rules

Spousal protections

Assets: The spouse at home keeps half of the couple’s countable assets, but not less than $32,532 or more than $162,660 in 2026, plus the home, one car and belongings.
Income: The spouse at home keeps their own income. If it is below $2,705 a month (from July 1, 2026), part of the applicant’s income can go to them, plus extra for high housing costs, up to $4,067 a month.

Look-back and penalties

When you apply, Indiana looks back at the 60 months (5 years) before the application date. This is called the look-back period. The state checks whether you, or your spouse, gave away money or property, or sold something for less than it was worth, during that time.

Common examples of transfers that can cause a problem:

Cash gifts to children or grandchildren, even small yearly gifts. (A gift that is fine for federal gift-tax purposes can still count for Medicaid.)
Adding a child’s name to a house deed or bank account in a way that gives them part ownership.
Selling a house or car to a relative for much less than it is worth.
Paying a family member for care without a written agreement made at the time.

Some transfers are allowed, such as transfers between spouses, or transferring a home to a child who is blind or disabled.

How the penalty works. If the state finds a transfer that is not allowed, it does not deny Medicaid forever. Instead, it sets a penalty period: a stretch of time when Medicaid will not pay for long-term care. The state divides the amount given away by the penalty divisor ($8,027 a month (from July 1, 2026)).

Example: Suppose you gave your son $50,000 three years before applying. $50,000 divided by $8,027 is about 6.2 months without Medicaid payment for long-term care.

The penalty period starts only once you have applied, are otherwise eligible, and are in (or need) long-term care. This is why gifts made while someone is healthy can still matter years later. If a gift is returned in full, the penalty can be removed.

Estate recovery in Indiana

Indiana’s estate recovery program is run by FSSA.

What is recovered: Medicaid paid for services received at age 55 or older, and for some people of any age in a nursing facility.
When it is put off: federal rules prevent recovery while a spouse is alive, or if there is a child under 21 or a child who is blind or disabled.
Hardship waivers: FSSA can waive or put off recovery in some situations. Ask FSSA for the current rules.
Family members and personal representatives can contact FSSA Estate Recovery with questions.

How to apply

Online: the FSSA Benefits Portal
In person or by mail: at your local Division of Family Resources office
For the PathWays or Health and Wellness waiver: contact your local Area Agency on Aging (Indiana’s Aging and Disability Resource Centers). It can place you on the waiting list and help with the steps when you are invited.

After you apply. DFR will send you a written notice saying whether you qualify, from what date, and how much of your income goes toward your care each month. If you disagree with a decision, you have the right to ask for a fair hearing. The notice explains how to ask and the deadline for asking. Keep copies of everything you send and receive, and report changes in income, assets or address when they happen.

Gather what you can before you apply. The caseworker may ask for:

Photo ID, Social Security card and Medicare card
Proof of age and of U.S. citizenship or immigration status
Proof that you live in the state (for example, a utility bill or lease)
Proof of all income: Social Security award letter, pension statements, annuity statements
Bank, credit union and investment statements (often for the full 60-month look-back period)
Deeds, property tax bills and the value of any real estate
Life insurance policies (showing cash value) and prepaid funeral or burial contracts
Vehicle titles
Health insurance cards and long-term care insurance policies
Power of attorney or guardianship papers, if someone is applying for you
For a spouse at home: their income and assets too, since both spouses’ assets are counted at the start

If you cannot find a document, apply anyway and tell the caseworker. They can explain what else is accepted.

Free public help in Indiana

FSSA and the Division of Family Resources: Medicaid applications and eligibility.
Area Agencies on Aging / Aging and Disability Resource Centers: local information on long-term care options and waiver referrals.
SHIP (State Health Insurance Assistance Program): Indiana’s free Medicare counseling program, through the Indiana Department of Insurance.
Indiana Long-Term Care Ombudsman Program: free advocates for residents of nursing homes and assisted living.

Recent and upcoming changes

A 2025 federal law (Public Law 119-21) makes two changes that affect Long-Term Care Medicaid in every state, including Indiana:

Retroactive coverage gets shorter on January 1, 2027. Today, Medicaid can pay bills from up to 3 months before the month you apply, if you would have qualified then. For applications from January 1, 2027, this window shrinks to 2 months for older adults and people with disabilities. In plain terms: from 2027, it matters more to apply soon after care starts, so that earlier bills are not left unpaid.
Home equity cap on January 1, 2028. States will no longer be able to set a home equity limit above $1,000,000 (except for some farm property). Indiana’s 2026 home equity limit, $752,000, is already below the new cap, so this change is not expected to affect Indiana’s limit.

The federal amounts that change each year (for example, the allowances for a spouse at home) will be updated on this page for 2027 once they are published.

State programs

Each program below has its own page with who qualifies, services, how to apply and waiting lists:

Frequently asked questions

What is Indiana PathWays for Aging? It is Indiana’s managed care program for Medicaid members 60 and older. A health plan coordinates your care, whether you live at home or in a nursing home.

Is there a waiting list for home care? Yes. FSSA keeps a waiting list for the PathWays and Health and Wellness waivers and sends invitations monthly as slots open. There is no waiting list for PathWays itself, only for waiver services.

My income is over $2,982 a month. Can I still qualify? Yes, with a Miller trust. Income above the cap goes into the trust each month and is used toward your care.

How much can my spouse keep? In 2026, half of the couple’s countable assets, at least $32,532 and up to $162,660, plus the home, a car and belongings, and income of at least $2,705 a month.

How long is the penalty for a gift? Divide the gift by $8,027 to get the number of months. A $20,000 gift would mean about 2.5 months without Medicaid payment for long-term care.

Will the state take my home after I die? FSSA can seek repayment for Medicaid paid after age 55, which can include the home. Recovery is put off while a spouse or a young or disabled child survives, and hardship waivers exist.

Figures change periodically. Double-check current amounts with Indiana FSSA before relying on them.

Sources

FSSA, Medicaid Policy Manual chapter 3000
FSSA, Facility rate used to calculate penalty period
FSSA, Miller trust
Indiana Long Term Care Insurance Program, 2026 annual figures
Indiana Medicaid, Aged and Disabled Waiver (split into PathWays and Health and Wellness)
Indiana PathWays for Aging, FAQ
FSSA, HCBS Medicaid waiver waiting list information
IHCP Bulletin BT202652, waiver invitation timelines
FSSA Benefits Portal
CMS, 2026 SSI and spousal impoverishment standards
Public Law 119-21 (2025)

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.