Indiana Medicaid Income and Asset Limits 2026: Long-Term Care Eligibility

Your parent needs nursing home care or home-based services through Indiana Medicaid, and the first question is whether they financially qualify. Indiana is an "income cap" state — meaning there's a hard monthly income ceiling, not a flexible spend-down. Exceeding that ceiling by even $1 disqualifies your parent entirely, unless you establish a specific type of trust. Here are the 2026 numbers.

Income Limits

Special Income Limit (SIL): $2,982 per month gross income. This is the maximum monthly income for long-term care Medicaid eligibility in Indiana for 2026. "Gross" means before any deductions — Social Security, pension, annuity income, investment income, everything.

If your parent's gross monthly income exceeds $2,982, they cannot qualify for Medicaid-funded long-term care unless they establish a Miller Trust (Qualified Income Trust). The Miller Trust routes the excess income through an irrevocable trust that names Indiana as the primary beneficiary upon the individual's death.

Key Miller Trust requirements in Indiana:

• Must be irrevocable
• Must use the applicant's Social Security Number (not a separate EIN)
• Must name the State of Indiana as primary beneficiary
• A dedicated bank account must be opened and funded before submitting the Medicaid application
• Only the "excess" income above the SIL flows through the trust each month

Asset Limits

Individual applicant: $2,000 in countable assets. This includes bank accounts, investments, stocks, bonds, CDs, and non-exempt property.

Married couple (both applying): $3,000 in combined countable assets.

What Doesn't Count as an Asset

• Primary home — exempt up to $752,000 in equity if the applicant or spouse resides there (or the applicant intends to return)
• One vehicle — exempt regardless of value
• Personal belongings and household goods
• Prepaid funeral arrangements and burial plots
• Term life insurance (no cash value)
• Whole life insurance with a combined face value of $1,500 or less

Spousal Protections

When only one spouse needs Medicaid-funded care, federal spousal impoverishment rules protect the at-home spouse from losing everything:

Community Spouse Resource Allowance (CSRA): The non-applicant spouse can retain 50% of the couple's combined countable assets, up to a maximum of $162,660 (2026). The minimum protected amount is $32,532.

Minimum Monthly Maintenance Needs Allowance (MMMNA): $2,705 per month (effective July 1, 2026). This is the guaranteed minimum monthly income for the community spouse. If the spouse's own income falls below this amount, the Medicaid applicant can transfer income to them to make up the difference.

Maximum Monthly Spousal Allowance: $4,066.50 per month (effective January 1, 2026). This caps the total monthly income that can be transferred from the Medicaid applicant to the community spouse.

The Five-Year Look-Back

When your parent applies for Medicaid, Indiana reviews five years (60 months) of financial records. Any asset transfers — gifts to family, transferring property, paying down a child's mortgage — made during this period may trigger a penalty period during which Medicaid won't cover care.

The penalty period is calculated by dividing the total transferred amount by the average monthly cost of nursing home care in Indiana. A $50,000 gift to a grandchild three years ago could result in months of Medicaid ineligibility — during which the family must pay nursing home costs out of pocket.

Patient Liability (Share of Cost)

Once approved for Medicaid-funded nursing home care, the resident keeps only $52 per month as a personal needs allowance. All remaining income goes to the facility as patient liability.

The formula:

Patient Liability = Gross Monthly Income - $52 PNA - Medicare/health insurance premiums - MMMNA transfer to community spouse (if applicable)

Timeline: When to Start Planning

The worst time to start Medicaid planning is the day the hospital announces discharge. Gathering five years of bank statements, establishing a Miller Trust, and completing the application takes weeks to months — and FSSA processing adds another 45 to 90 days.

If your parent is heading toward a care transition, start the financial assessment now. The Indiana Hospital-to-Home Transition Guide includes a Medicaid eligibility worksheet, Miller Trust requirements checklist, and a step-by-step application timeline calibrated to Indiana's specific rules.

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