Indiana Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: July 10, 2024

 

Indiana Medicaid Long-Term Care Definition

Medicaid provides low-income individuals of all ages with health care coverage. While there are multiple coverage groups, this page is focused on long-term care Medicaid eligibility for senior Indiana residents (65 years of age and over). In addition to nursing home care and care services in adult foster care homes and assisted living facilities, IN Medicaid pays for non-medical services and supports to help frail seniors remain living at home. There are three categories of Medicaid long-term care programs for which Indiana seniors may be eligible.

1) Institutional / Nursing Home Medicaid – An entitlement; anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Medicaid Waivers / Home and Community Based Services – Not an entitlement; the number of participant slots is limited and waiting lists may exist. Intended to delay the need for nursing home admissions, services are provided at home, adult day care, adult foster care, or in assisted living.

3) Regular Medicaid / Aged Blind and Disabled – An entitlement; meeting the eligibility requirements ensures services will be received. Various long-term care services, such as personal care assistance or adult day care, may be available.

In IN, Medicaid for the Aged, Blind, and Disabled, including those in a nursing home, is provided via two programs: Hoosier Care Connect and Traditional Medicaid. Hoosier Care Connect, a managed care program, is for persons who are not eligible for Medicare. Traditional Medicaid is fee-for-service, as opposed to managed care. While Medicaid is jointly funded by the state and federal government, it is administered by the state. The Family and Social Services Administration (FSSA) Office of Medicaid Policy and Planning (OMPP) is the state’s administering agency.

  The American Council on Aging now offers a free, quick and easy Medicaid Eligibility Test for seniors.

 

Income & Asset Limits for Eligibility

Each of the three Medicaid long-term care categories have varying financial and functional eligibility requirements. Further complicating financial eligibility is that the criteria changes annually, varies with marital status, and that Indiana offers multiple pathways towards eligibility.

 Simplified Eligibility Criteria: Single Nursing Home Applicant
IN seniors must have limited income and assets, and a medical need to qualify for Medicaid long-term care. In 2024, a single Nursing Home Medicaid applicant must meet the following criteria: 1) Income under $2,829 / month 2) Assets under $2,000 3) Require a Nursing Home Level of Care.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from an Indiana Medicaid program. Alternatively, taking the Medicaid Eligibility Test may be helpful. IMPORTANT: Not meeting all the criteria does not mean one is ineligible or cannot become eligible for Medicaid in Indiana. More.

2024 Indiana Medicaid Long-Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,829 / month* $2,000 Nursing Facility $2,829 / month per spouse* $3,000 Nursing Facility $2,829 / month for applicant* $2,000 for applicant & $154,140 for non-applicant Nursing Facility
Medicaid Waivers / Home and Community Based Services $2,829 / month† $2,000 Nursing Facility $2,829 / month per spouse† $3,000 Nursing Facility $2,829 / month for applicant† $2,000 for applicant & $154,140 for non-applicant Nursing Facility
Regular Medicaid / Aged Blind and Disabled $1,255 / month (eff. 3/1/24 – 2/28/25) $2,000 Help with ADLs $1,703 / month (eff. 3/1/24 – 2/28/25) $3,000 Help with ADLs $1,703 / month (eff. 3/1/24 – 2/28/25) $3,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $52 / month, Medicare premiums, and potentially a Needs Allowance for a non-applicant spouse, must be paid to the nursing home. This is called a Patient Liability.

†Based on one’s living setting, a program beneficiary may not be able to keep monthly income up to this level.

 

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards the income limit. This includes employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in IN, the Veteran’s Aid & Attendance and Housebound, which are above and beyond the Basic VA Pension, do not count as income.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Institutional Medicaid or a HCBS Medicaid Waiver, only the income of the applicant is counted. The income of the non-applicant spouse is disregarded. The non-applicant spouse, however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is a Spousal Impoverishment Rule and is the minimum amount of monthly income a non-applicant spouse is said to require to avoid poverty.

The MMMNA in IN is $2,555 (effective 7/1/24 – 6/30/25). If a non-applicant’s monthly income is under $2,555, income can be transferred to them from their applicant spouse, bringing their income up to this level. In Indiana, a non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $766.50 / month (effective 7/1/24 – 6/30/25). However, in 2024, a Spousal Income Allowance cannot push a non-applicant’s total monthly income over $3,854. This is the Maximum Monthly Maintenance Needs Allowance. More on how this allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; the income of both spouses counts towards the income eligibility of the applicant spouse. Furthermore, there is no Monthly Maintenance Needs Allowance for the non-applicant spouse. More on how Medicaid counts income for eligibility purposes.

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable assets are counted towards Medicaid’s asset limit. This includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), and real estate in which one does not reside. In Indiana, an applicant’s IRA / 401K is counted. There are also many assets that are exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home. In IN, a non-applicant spouse’s IRA / 401K is exempt.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. However, Spousal Impoverishment Provisions permit the non-applicant spouse of a Medicaid Nursing Home or Waiver applicant a Community Spouse Resource Allowance (CSRA). In 2024, the community spouse (the non-applicant spouse) can keep 50% of the couples’ joint assets, up to a maximum of $154,140. If the non-applicant’s half of the assets is under $30,828, 100% of the assets, up to $30,828 can be keep by the non-applicant.

Medicaid’s Look-Back Rule
Indiana has a 5-year Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers that immediately precedes one’s Medicaid application date. During this period, Medicaid checks all past asset transfers to ensure no assets were sold or gifted under fair market value. This includes asset transfers made by one’s spouse. The Look-Back Rule is intended to discourage persons from gifting assets to meet Medicaid’s asset limit. Violating this rule results in a Penalty Period of Medicaid ineligibility.

Indiana allows Medicaid applicants to gift up to $1,200 (in total) annually to family members and / or tax-exempt non-profit organizations without violating the Look-Back Period. This is called a “de minimis transfer allowance”.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, the Gift Tax Rule allows one to gift up to $18,000 per recipient without filing a Gift Tax Return. Gifting under this rule violates Medicaid’s Look-Back Period.

 

Indiana Medicaid Home Exemption Rules

For the home to be exempt, the Medicaid applicant or their spouse must live in it. If there is no spouse in the home, there is a home equity interest limit of $713,000 (in 2024). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of the home’s equity that is owned by the applicant. Furthermore, if there is no spouse in the home, and the Medicaid applicant does not live there, the applicant must have Intent to Return. For Regular Medicaid, there is no home equity interest limit. Other exemptions exist.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Indiana’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

 

Medical / Functional Need Requirements

An applicant must have a medical need for long-term care. For Nursing Home Medicaid and HCBS Medicaid Waivers, a Nursing Home Level of Care (NHLOC) is required. Certain benefits may also have additional requirements. For example, for a Waiver to pay for home modifications, an inability to safely live independently without modifying the home may be required. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NHLOC is not necessarily required.

 

Qualifying When Over the Limits

For Indiana residents, 65 years of age and over, who do not meet the Medicaid financial eligibility requirements above, there are other ways to qualify for Medicaid.

1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, QITs offer a way for individuals over the Medicaid income limit to still become income-eligible for Nursing Home Medicaid or a Medicaid Waiver. For Medicaid eligibility purposes, monthly income put into an irrevocable QIT no longer counts as income. Irrevocable means the trust cannot be changed or cancelled. In very simple terms, income over the Medicaid income limit is deposited into a trust in which a trustee has legal control. The funds can only be used for very specific purposes, such as paying medical expenses accrued by the Medicaid enrollee.

2) Asset Spend Down – Persons who have countable assets over IN’s asset limit can “spend down” assets to reach the Medicaid asset limit. This can be done by spending excess assets on ones that are non-countable, such as home repairs and additions (updating plumbing system, adding a ground floor bedroom, and reroofing), home modifications (addition of wheelchair ramps, chair lifts, and walk-in tubs), prepaying funeral and burial expenses, and paying off existing debt (car, mortgage, and credit cards). Remember, assets cannot be gifted or sold under fair market value. Doing so violates the Look-Back Rule and can cause a Penalty Period of Medicaid ineligibility. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

 Our Indiana Medicaid Spend Down Calculator can assist persons in determining if they might have a spend down, and if so, provide an estimate of the amount.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of care. For these persons, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid-eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

 

Specific Indiana Medicaid Programs

In addition to paying for nursing home care, IN Medicaid offers the following programs relevant to the elderly that helps them to live at home and “in the community”.

1) Aged and Disabled (A&D) Waiver – The A&D Waiver became the Health & Wellness (H&W) Waiver on 7/1/24. The H&W Waiver continues to provide home and community based services, but for persons aged 59 and younger. July 1, 2024, persons aged 60+ were transitioned to Indiana’s new Medicaid managed care program, Pathways for Aging, through which medical care and long-term services and supports are provided for seniors.

2) Program of All-Inclusive Care for the Elderly (PACE) – The benefits of Medicaid, including long-term care services, and Medicare are combined into one program. Additional benefits, such as dental and eye care, may be available.

3) Indiana Structured Family Caregiving (SFC) – This is a unique benefit in Indiana via Pathways for Aging or PACE Program that warrants explanation. SFC allows an aging parent to move into the home of their adult child (or vice versa) and the state will compensate the adult child to serve as their parent’s caregiver. Other relatives can also become the paid caregiver, but only through Pathways can a spouse or legal guardian be paid through SFC.

4) Pathways for Aging – Implemented 7/1/24, this is a managed care program for state residents aged 60 and older. While medical care is provided, persons who require a Nursing Facility Level of Care can also receive nursing facility care, as well as a variety of home and community based services. This includes meal delivery, adult day care, home modifications, and services at home, in assisted living, and adult foster care (adult family care) homes, among many other supports that help seniors to live and function independently. For some services, beneficiaries are given the choice of care providers and can even hire family members to provide them with personal care assistance.

5) Money Follows the Person (MFP) – This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

 

How to Apply for Indiana Medicaid

Elderly Indiana seniors can apply for Medicaid online by completing the “Indiana Application for Health Coverage” on the FSSA (Family and Social Services Administration) Benefits Portal. They can also apply in person at their local FSSA DFR (Division of Family Resources) office. Alternatively, seniors can call DFR at 1-800-403-0864 to apply. The application process may vary based on the program for which one is applying.

Seniors should be certain they meet all eligibility requirements prior to applying for Medicaid. If persons do not meet the criteria, or are unsure, Medicaid planning is recommended. The application process for long-term care Medicaid can be complicated and confusing. Familiarizing oneself with general information about the application process can be helpful.

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