Most long-term care in the United States is paid for by Medicaid — not Medicare. Medicare covers short rehab stays after a qualifying hospital admission and then stops. The bill for ongoing nursing-home care, memory care, or in-home aide hours falls to private savings, long-term-care insurance (if your parent bought it years ago), or the state Medicaid program.1 In Indiana, Medicaid LTC is administered by the Family and Social Services Administration (FSSA) and delivered through managed-care contractors.

The three eligibility tests

1. Medical eligibility

Before the financial math starts, your parent needs to be medically eligible. Indiana uses a Level of Care (LOC) assessment for nursing-facility eligibility. The LOC reviews activities of daily living — bathing, dressing, eating, transferring, toileting — and determines whether your parent meets the nursing-facility level of care threshold.2

For the A&D waiver, the assessment is conducted by an Area Agency on Aging case manager or FSSA-contracted assessor. Wait times vary by region; central Indiana has historically processed faster than rural counties.

2. Income

Indiana applies the federal income cap of approximately $2,901/month (300% of the SSI Federal Benefit Rate, 2026) for Medicaid long-term care. If your parent's gross monthly income from all sources exceeds that, they're not automatically disqualified. Indiana is an income-cap state, so applicants above the cap use a Qualified Income Trust (QIT, sometimes called a Miller Trust).

3. Assets

This is where families lose months and tens of thousands of dollars to bad advice. The applicant's countable assets must be at or below $2,000 at the moment of application. "Countable" is doing a lot of work in that sentence.

Not counted (in most cases):

Counted:

The 5-year look-back, in plain English

Indiana (like every state) reviews transfers of assets for less than fair market value made in the 60 months before application. Any uncompensated transfer — a gift to a child, a below-market sale, a substantial charitable contribution above modest gift levels — triggers a penalty period during which the applicant is otherwise eligible but Medicaid won't pay for nursing-home care.

The penalty math: the value of the transfer divided by Indiana's penalty divisor (approximately $7,500–$8,500/ month in 2026). A $50,000 gift produces roughly a 6-month penalty. The penalty clock does notstart until your parent is otherwise eligible — meaning they've spent down to $2,000 and are in care. So the penalty hits exactly when the family needs Medicaid most.

The Aged & Disabled (A&D) waiver

Indiana's primary HCBS Medicaid waiver is the Aged & Disabled (A&D) waiver, which provides home- and community- based services as an alternative to institutional care. Services include personal care, homemaker, respite, attendant care, adult day services, environmental modifications, and case management.3

Eligibility requires both financial qualification (the same rules as institutional Medicaid) and a Level of Care determination at or near the nursing-facility level. Apply through your local Area Agency on Aging.

How services are delivered

Once eligible, Indiana Medicaid LTC services are delivered through managed-care organizations (or specialty programs like the A&D waiver) coordinated by FSSA. Indiana's managed-care contractors handle utilization management, provider networks, and member services. The specific MCO assigned to your parent depends on region and program enrollment.4

The community-spouse situation

If one spouse needs care and the other doesn't, the rules get more favorable. The well spouse (the "community spouse") keeps:

Most one-spouse-needs-care situations can be planned to a non-catastrophic outcome with 12–24 months of lead time. Talk to an Indiana elder-law attorney before doing anything — DIY here is where the most expensive mistakes happen.

When to start planning

Honest answer: yesterday, if you can. Realistic answer: as soon as you see meaningful decline. Legitimate planning tools — spend-down on exempt assets, certain trust structures, spousal transfers — work well at the 5-year mark and progressively worse the closer you get to application.

That doesn't mean it's ever too late. Plenty of Indiana families plan in the final 6–18 months and meaningfully improve the outcome. It just means the toolkit narrows.

The CHOICE alternative

For Hoosiers who don't qualify financially for Medicaid LTC but still need help, Indiana operates the Community and Home Options to Institutional Care for the Elderly and Disabled (CHOICE) program— state-funded, broader eligibility than Medicaid, covers in-home services for seniors 60+ at risk of nursing-home placement. Worth investigating before assuming Medicaid is the only path.5

What to do this month

For the broader national context on Medicaid eligibility, see our Medicaid pillar overview. For the Indiana-specific legal and estate-planning side, see Legal & Financial in Indiana.