Long-Term Care Planning in Indiana: Costs, Medicaid & Your Options (2026 Guide)

Indiana's long-term care costs are below the national average across most care types — assisted living averages $5,639 per month, approximately 9% below the national average, while nursing home care averages $8,943 per month, roughly 7% below. Home care costs $6,673 per month, matching the national average. Indiana's Medicaid program is administered by the Family and Social Services Administration (FSSA) Office of Medicaid Policy and Planning (OMPP). Indiana uses Qualified Income Trusts (Miller Trusts) for applicants over the income limit — the state does not have a Medically Needy pathway. Key programs include Pathways for Aging (launched 7/1/24) and the unique Structured Family Caregiving (SFC) program, which compensates family members to serve as paid caregivers. This guide covers what care costs in Indiana, how to qualify for Medicaid, and what options exist for veterans and family caregivers in Indianapolis, Fort Wayne, Evansville, South Bend, and across the state.

Indiana's Aging Population: The Numbers Behind the Need

Indiana is home to more than 1 million residents aged 60 or older, with the senior population concentrated in the Indianapolis metropolitan area — including Indianapolis, Carmel, Fishers, and Greenwood — which accounts for the largest share of the state's long-term care demand. Significant aging communities also exist in Fort Wayne, Evansville, South Bend, Lafayette, and Bloomington.

Indiana's mix of urban centers and rural communities creates distinct challenges for long-term care delivery. While Indianapolis and Fort Wayne have robust networks of assisted living facilities, nursing homes, and home care agencies, rural areas across southern and central Indiana often have fewer options — making home and community-based services essential for keeping seniors close to family.

Unpaid Caregivers in Indiana: Scale and Impact

An estimated 850,000 unpaid family caregivers in Indiana provide care to aging relatives and adults with disabilities. According to AARP research, family caregivers nationwide spend an average of $7,242 per year in out-of-pocket costs related to caregiving.

Indiana's Structured Family Caregiving (SFC) program is a distinctive benefit — available through Pathways for Aging and PACE — that allows an aging parent to move into the home of their adult child (or vice versa) and the state compensates the adult child to serve as their parent's caregiver. Other relatives can also become the paid caregiver. Through Pathways for Aging, a spouse or legal guardian can also be paid through SFC. The Pathways for Aging program (launched 7/1/24) further supports caregivers by providing adult day care, meal delivery, home modifications, personal emergency response systems, and respite care for persons aged 60+.

What Long-Term Care Costs in Indiana

Indiana's care costs vary by type of care:

• Assisted Living: $5,639 per month — approximately 9% below the national average of $6,200
• Nursing Home (semi-private room): $8,943 per month — approximately 7% below the national average of $9,581
• Home Care (home health aide): $6,673 per month — matches the national average of $6,673
• Adult Day Care: $2,752 per month — approximately 34% above the national average of $2,058

At these rates, a three-year nursing home stay in Indiana costs approximately $322,000 — while home care totals roughly $240,000 over the same period. Assisted living, at $5,639/month, represents the most affordable facility-based option at approximately $203,000 over three years. For a detailed breakdown of care costs by type and how Indiana compares to other states, visit our Indiana Care Costs page.

How to Qualify for Medicaid in Indiana: Eligibility Rules for 2026

In Indiana, Medicaid for the Aged, Blind, and Disabled is provided via two delivery systems: Hoosier Care Connect (managed care for persons not eligible for Medicare) and Traditional Medicaid (fee-for-service). Consulting with an Indiana elder law attorney or Certified Medicaid Planner early can help families avoid costly mistakes. Eligibility rules vary by program type:

• Nursing Home Medicaid (Institutional): Income limit of $2,982 per month — with the exception of a $52/month Personal Needs Allowance, Medicare premiums, and potentially a Needs Allowance for a non-applicant spouse, all of a beneficiary's monthly income must go towards nursing home costs as Patient Liability. Asset limit of $2,000 (single) or $3,000 (married couple, both applying). When one spouse applies, the non-applicant spouse can retain up to $162,660. This is an entitlement. Level of care required: Nursing Facility.
• Medicaid Waivers / Home and Community Based Services: Income limit of $2,982 per month; asset limit of $2,000 (single). This is not an entitlement — participant slots are limited and waiting lists may exist. Services are intended to delay nursing home admissions and may be provided at home, adult day care, adult foster care, or in assisted living. Level of care required: Nursing Facility.
• Regular Medicaid / Aged Blind and Disabled: Income limit of $1,330 per month (single, eff. 3/1/26 – 2/28/27) or $1,803.33 per month (couple); asset limit of $2,000 (single) or $3,000 (couple). This is an entitlement. Some long-term care services, such as personal care assistance or adult day care, may be available. Level of care: Help with ADLs. In Indiana, persons determined eligible for SSI are automatically approved for Regular Medicaid.

Indiana does not have a Medically Needy / Spend-Down pathway for income. Instead, applicants whose income exceeds the $2,982/month limit can use a Qualified Income Trust (Miller Trust). Monthly income deposited into this irrevocable trust no longer counts as income. A trustee has legal control and funds can only be used for specific purposes such as paying medical expenses.

Indiana applies a 60-month (5-year) look-back period for Nursing Home Medicaid and Medicaid Waiver applications. Asset transfers during this period — including gifts to family members and transfers by one's spouse — can trigger a penalty period of Medicaid ineligibility. Indiana allows a de minimis transfer allowance of up to $1,200 annually (in total) to family members and/or tax-exempt non-profit organizations without violating the look-back period. The federal $19,000 Gift Tax exclusion (2026) does NOT apply to Medicaid's look-back rules. For the full Indiana Medicaid eligibility breakdown, see our Indiana Medicaid Guide.

Spousal Protections and Community Spouse Resource Allowance

When one spouse applies for Nursing Home Medicaid or a Medicaid Waiver in Indiana, only the applicant spouse's income is counted. The Community Spouse Resource Allowance (CSRA) allows the non-applicant spouse to retain up to $162,660 in countable assets. The minimum CSRA is $32,532. If the non-applicant's share of assets falls below $32,532, up to that amount can be retained.

Indiana sets the Minimum Monthly Maintenance Needs Allowance (MMMNA) at $2,644 per month (eff. 7/1/25 – 6/30/26). If the non-applicant spouse's income falls below this amount, income can be transferred from the applicant spouse. A non-applicant spouse can further increase their Spousal Income Allowance if housing and utility costs exceed a shelter standard of $793 per month (eff. 7/1/25 – 6/30/26). The Maximum MMMNA is $4,067 — a Spousal Income Allowance cannot push income above this level. For Regular Medicaid, both spouses' income is counted and there is no MMMNA or CSRA.

Indiana Medicaid Programs: Pathways for Aging, SFC, and More

Indiana offers several Medicaid-funded long-term care programs:

• Pathways for Aging: Implemented 7/1/24, this managed care program serves state residents aged 60+. Persons requiring a Nursing Facility Level of Care can receive nursing facility care or HCBS at home, assisted living, or adult foster care. Benefits may include assistance with daily living, meal delivery, adult day care, home modifications, personal emergency response systems, and respite care. Beneficiaries can choose care providers and may hire family for personal care assistance.
• Structured Family Caregiving (SFC): A unique benefit via Pathways for Aging and PACE that allows an aging parent to move into the home of their adult child (or vice versa) and the state compensates the adult child to serve as their parent's caregiver. Other relatives can also become the paid caregiver. Through Pathways, a spouse or legal guardian can also be paid through SFC.
• Health & Wellness (H&W) Waiver: Formerly the Aged and Disabled (A&D) Waiver, the H&W Waiver provides HCBS for persons aged 59 and younger. Program beneficiaries aged 60+ were transitioned to Pathways for Aging on 7/1/24.
• 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.
• Money Follows the Person (MFP): A federal program that helps institutionalized Medicaid-eligible persons transition back home or into the community.

Qualifying When Over the Limits: Miller Trusts and Asset Spend-Down

If your income or assets exceed Indiana Medicaid limits, several strategies may help you qualify:

• Qualified Income Trusts (Miller Trusts): QITs allow persons over the $2,982/month income limit to become income-eligible for Nursing Home Medicaid or a Medicaid Waiver. Monthly income deposited into this irrevocable trust no longer counts as income. A trustee has legal control and funds can only be used for specific purposes such as paying medical expenses. Indiana does not have a Medically Needy / Spend-Down pathway — Miller Trusts are the only option for persons over the income limit.
• Asset Spend-Down: Spend excess assets on non-countable items — home repairs and additions, home modifications (wheelchair ramps, chair lifts, walk-in tubs), prepaying funeral/burial expenses, and paying off debt. Keep documentation as proof Medicaid's look-back rule was not violated.
• Medicaid Planning: Work with a Medicaid Planning Professional or Indiana elder law attorney to employ legal strategies for eligibility and protect your home from Medicaid's Estate Recovery Program.

Asset Rules: What Counts and What Doesn't

Countable assets in Indiana include cash, stocks, bonds, investments, cryptocurrency, bank accounts (money market, savings, checking), and real estate in which one does not reside. In Indiana, an applicant's AND their spouse's IRA / 401K is counted as an asset — unlike many states where a spouse's retirement account may be exempt. Non-countable (exempt) assets include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one's primary home (subject to the home equity limit). All assets of a married couple are considered jointly owned regardless of the Medicaid program.

The CSRA allows the non-applicant spouse to retain 50% of the couple's assets, up to $162,660. If the non-applicant's share is under $32,532, up to $32,532 can be retained. There is no CSRA for Regular Medicaid.

Veterans and Long-Term Care in Indiana

Indiana has a significant veteran population, with major military installations including Camp Atterbury (south of Indianapolis) and Grissom Air Reserve Base (near Kokomo). The Richard L. Roudebush VA Medical Center in Indianapolis serves as the primary VA healthcare facility for veterans across central Indiana. The VA Aid & Attendance benefit provides additional monthly income to veterans and surviving spouses who require assistance with activities of daily living. In Indiana, VA Aid & Attendance and Housebound Pensions (above the Basic VA Pension) do NOT count as income for Medicaid eligibility purposes, which can help veterans qualify for both benefits simultaneously.

For a comprehensive overview of veteran long-term care benefits, see our Veterans Long-Term Care Guide.

Planning Ahead: How to Pay for Nursing Home Care in Indiana

Understanding how to pay for nursing home care in Indiana — or any long-term care setting — requires evaluating multiple funding sources. With nursing home costs at $8,943/month, a 5-year look-back period, and no Medically Needy pathway, advance planning is essential. Indiana long-term care insurance policies, personal savings, veterans benefits, and Indiana Medicaid each play a role. Key steps include:

• Understanding your current financial position relative to Indiana Medicaid eligibility thresholds
• Evaluating the need for a Qualified Income Trust (Miller Trust) if income exceeds $2,982/month — since Indiana has no Medically Needy pathway
• Exploring Pathways for Aging and Structured Family Caregiving to delay or avoid nursing home placement
• Understanding that both spouses' IRAs/401Ks are counted as assets in Indiana
• Using the $1,200/year de minimis transfer allowance for modest gifts without violating the look-back period
• Researching Indiana long-term care insurance options while still healthy enough to qualify
• Exploring veterans benefits if the care recipient or spouse served during wartime
• Consulting with an Indiana elder law attorney or Certified Medicaid Planner to protect assets and avoid look-back penalties

Estate Recovery: Protecting Your Home in Indiana

Indiana operates a Medicaid Estate Recovery Program, which allows the state to seek reimbursement from a deceased Medicaid beneficiary's estate for long-term care costs paid by Medicaid. This can include the family home if proper protections are not in place. The primary home is automatically exempt if the applicant's spouse, child under 21, or permanently blind or disabled child (of any age) lives in it.

If none of these conditions are met, Indiana uses a home equity interest limit of $730,000 (2026). Home equity is the value of the home minus any outstanding debt; equity interest is the amount of equity owned by the applicant. If neither the applicant nor qualifying family lives in the home, the applicant must have Intent to Return. There is no home equity interest limit for Regular Medicaid. The home is NOT exempt from Medicaid's Estate Recovery Program — after a beneficiary's death, Indiana's Medicaid agency attempts reimbursement of care costs through the deceased's estate.

Regional Cost Variations Across Indiana

While Indiana's statewide averages are $5,639/month for assisted living, $8,943/month for nursing home care, and $6,673/month for home care (CareScout 2025), costs vary by region. The Indianapolis metropolitan area — including Indianapolis, Carmel, Fishers, and Greenwood — has the highest concentration of care facilities and the most competitive market, with costs that can run above statewide averages.

Northern Indiana — Fort Wayne, South Bend, and Lafayette — generally has costs close to statewide averages, with Fort Wayne offering a solid range of facility options. Southern Indiana — Evansville, Bloomington, and Terre Haute — may have fewer facility options in more rural areas. The key takeaway: Indiana's below-average assisted living costs provide an opportunity for families planning early, while the state's unique Structured Family Caregiving program offers a compelling alternative to facility-based care.

For a detailed cost breakdown and interactive calculator, visit our Indiana Care Costs page.

Application Timeline and Process

The Indiana Medicaid application process typically takes 45 to 90 days from submission to determination. Applications can be submitted online through the FSSA Benefits Portal (fssabenefits.in.gov), in person at a local FSSA Division of Family Resources (DFR) office, or by calling 1-800-403-0864.

Common reasons for application delays or denials include incomplete financial documentation, unreported asset transfers within the look-back period, and assets exceeding the $2,000 threshold. Prior to submitting a Medicaid application, it is imperative that seniors are certain they meet all eligibility requirements. Starting the application process before a care crisis — and gathering financial records in advance — significantly reduces the risk of gaps in coverage. Persons with income and/or assets in excess of the limits can benefit from Medicaid planning with an Indiana elder law attorney.

Federal Policy Update: One Big Beautiful Bill Act (OBBBA)

The One Big Beautiful Bill Act (OBBBA), currently under congressional consideration, proposes significant reductions to federal Medicaid funding — potentially exceeding $1 trillion over ten years. If enacted, these cuts could directly impact Indiana's Medicaid programs. Nursing Home Medicaid, as an entitlement, is largely protected from future funding cuts. However, Home and Community Based Services (HCBS) — including Pathways for Aging, the H&W Waiver, SFC, and PACE — are likely to be targeted, potentially leading to reduced service hours, tighter eligibility requirements, or longer waiting lists.

Potential consequences for Indiana families include reduced Pathways for Aging service availability, longer waits for HCBS enrollment, and increased pressure on the state's estimated 850,000 unpaid family caregivers. Given Indiana's unique SFC program — which directly compensates family caregivers — federal funding reductions could threaten one of the most innovative caregiver support programs in the nation. Families planning for long-term care in Indiana should consider these policy risks when evaluating their timeline for Medicaid applications and alternative funding strategies.

Last updated: September 2026 | Sources: CareScout 2025, Indiana FSSA, AARP, U.S. Census Bureau