By Indy Senior Advisor Care Team · July 27, 2026
Indiana recovers what Medicaid paid for a person's care after age 55, and the family home is squarely in scope. Here is what the state can claim, what it cannot touch, and the two deadlines that catch families off guard.
The question nobody asks the social worker
It usually comes up in a hallway, after the Medicaid application has already been filed. Someone says, quietly, so does the state take the house? And whoever is standing there gives a half-answer, because the real answer is complicated and nobody wants to be the person who says the wrong thing about a house.
The short version: Indiana does not take the house while your parent is alive. Estate recovery happens after death. But the house is not protected simply because it was exempt during the Medicaid eligibility determination, and that distinction is where most families get blindsided. An asset can be exempt for eligibility and still be recoverable at death. They are two different tests, run at two different times, by two different parts of the system.
This page is general information, not legal advice, and estate recovery is an area where an hour with an Indiana elder law attorney is usually worth what it costs. What follows is what the state itself publishes, so you at least know which questions to bring.
What Indiana counts as an estate
The Family and Social Services Administration runs the Medicaid Estate Recovery Program, and it seeks to recover the total amount Medicaid paid on a person's behalf after they turned 55. Not the amount the family thinks was fair. Not the amount spent in the final year. Everything after the 55th birthday.
The word estate is where Indiana is broader than families expect. FSSA defines it as the assets and property owned at death, including everything in the probate estate and non-probate assets conveyed through a non-probate transfer. That second category is the surprise. Money in a bank account is recoverable regardless of whether the account has a payable-on-death provision or a joint owner. Funds left in a Qualified Income Trust, also called a Miller Trust, are recoverable as of the date of death. So is whatever remains in a nursing home resident account, and whatever is left in a funeral trust after the funeral is paid in full.
Annuities purchased after May 1, 2005 are recoverable, including ones that do not name the State of Indiana as a beneficiary. Assets moved into a revocable trust after May 1, 2002 are recoverable. If your family's plan was built around the idea that avoiding probate avoids the state, that plan is roughly twenty years out of date in Indiana.
The house is the part people get wrong
Indiana says plainly that a Medicaid recipient's house and real estate may be subject to recovery. It then adds the sentence that catches families: this includes a house that, at the time of death, passed to another person through joint tenancy with right of survivorship, if the joint tenancy was created after June 30, 2002.
That matters because adding an adult child to the deed is the single most common piece of do-it-yourself estate planning in central Indiana. It is easy, it is cheap, it feels like it solves the problem, and for any joint tenancy created in the last twenty-three years it does not stop estate recovery at all. Families who did this in 1998 are in a different position than families who did it in 2018.
Real property held subject to a life estate is on the list of assets that cannot be recovered. That is a genuinely different instrument from a joint tenancy, executed differently, with different consequences for control and taxes. Do not assume the deed you have is the one you meant to have. Pull it and read it before you decide anything.
One more wrinkle worth knowing: a transfer-on-death deed does not put the property outside reach either. FSSA specifically lists TOD-deed transfers among the situations where the state's ordinary filing deadline does not apply.
The nine-month clock, and when it does not run
Indiana used to have 120 days after death to file its claim. That window is now nine months. The state's own estate recovery page dates the change to July 1, 2025; several Indiana law firms describe the same nine-month rule as taking effect July 1, 2026. We could not reconcile that discrepancy from a primary source, and it does not change the practical point: as of this writing, the window is nine months, not four.
The nine months is a limit on the state, not a countdown for you. And it has holes in it. FSSA says the time limit does not apply to assets that were never reported to the county Division of Family Resources office, to property transferred by transfer-on-death deed, to property transferred during the recipient's life while they were on Medicaid, or to property transferred after death and left out of the probate estate. Unreported assets do not become safe by being unreported. They become open-ended.
There is a separate deadline running the other direction. Since July 1, 2018, Indiana Code 29-1-7-7(d) has required that a Notice of Administration for any decedent who was at least 55 at death be sent to Medicaid Estate Recovery as a reasonably ascertainable creditor. If you are opening a probate estate for a parent who was 55 or older, that notice goes to the Estate Recovery Program at 402 W. Washington Street, W451, MS 27, Indianapolis. That is not optional paperwork.
Also expect the number to move. Medicaid providers generally have 180 days from the date of death to bill, so the claim amount can keep growing after the funeral. Request a current figure from the program before anyone writes a check.
What the state cannot touch
The exclusion list is real and it is worth reading before you assume the worst. Indiana will not recover at all while the recipient is survived by a spouse, a child under 21, or a child who is blind or disabled. That protection covers everything, not just the house.
Beyond that, life insurance proceeds paid to a named beneficiary are out of reach. So is real property subject to a life estate. So are non-probate assets that were transferred out of the probate estate before May 1, 2002, and annuities purchased before May 1, 2005. Personal effects, ornaments and keepsakes are excluded, which is the state's way of saying nobody is coming for your mother's wedding ring or the photo albums.
And assets protected by an Indiana Partnership long-term care insurance policy are excluded, which is the one item on this list a family can still do something about years in advance.
What PathWays managed care added to the arithmetic
Since July 1, 2024, most Hoosiers 60 and older receiving long-term-care Medicaid are enrolled through Indiana PathWays for Aging, a managed care program. That changed how the money moves, and it may change what gets recovered.
Under managed care, the state pays a managed care entity a fixed monthly capitation payment for each enrolled member, whether that member used a great deal of care that month or almost none. FSSA's description of estate recovery expressly includes capitation payments made to a managed care entity, and its definition of a capitation payment expressly names PathWays alongside HIP, Hoosier Healthwise and Hoosier Care Connect.
Read together, that suggests months of low utilization can still generate a recoverable amount. We want to be careful here: the sentence on FSSA's page that names capitation in the recovery context names the Healthy Indiana Plan specifically, so we are not going to state flatly that PathWays capitation is recovered the same way. Ask the Estate Recovery Program directly at 877-267-0013, and ask in writing. It is a fair question and it is one the family is entitled to a straight answer on.
The hardship waiver has a short fuse
Indiana will not pursue recovery where doing so would cause substantial and undue hardship for surviving beneficiaries. Applications from immediate family members are considered as a matter of course; applications from anyone else are considered only in exceptional circumstances.
The catch is timing. A hardship waiver application must be submitted within 90 days of the date of the claim. Ninety days is not long when a family is also handling a funeral, an empty house, and siblings in three states. If the claim arrives and hardship is even arguably in play, start that application the week it lands, not the month after.
It also helps to know where the state stands in line. Its claim has preferred status, meaning it is paid in full before other debts and before anything is distributed to heirs. A short list of expenses can be paid first: costs of administration, funeral and cemetery expenses up to $3,500 under Indiana Code 12-14-17, and possibly certain last-illness expenses. Money left in a Miller Trust cannot be used for any of those.
The only lever that works in advance
Everything above describes a bill arriving after someone has died. There is one Indiana-specific mechanism that prevents it beforehand, and it only works if the planning happens years earlier: the Indiana Long Term Care Insurance Program, the state's Partnership program.
Indiana was one of the original Partnership pilot states, and its policies carry a Medicaid asset protection benefit the state adds at no extra premium cost. Every dollar the policy pays in benefits shelters a dollar of countable assets from Medicaid eligibility, and assets protected by a qualified Partnership policy are on FSSA's list of things estate recovery cannot reach. Buy coverage at or above the state-set threshold with 5 percent compound inflation protection and you can earn total asset protection once benefits are exhausted. For policies effective January 1, 2026, that threshold is $548,820 in initial policy amount, and the minimum daily nursing home benefit is $115. Both figures reset annually.
This is not useful advice for a family whose parent is already in a facility. It is extremely useful advice for the adult child reading this at 58 and thinking about their own turn. If that is you, ILTCP publishes the current figures itself, and its list of participating carriers is public.
For the situation actually in front of you, the honest next step is narrower: find the deed, find out whether a Miller Trust exists, and get a claim amount in writing. Then decide. If the money side of this is what is driving the timeline, our page on what to do when the money is running out covers the spend-down sequence, and the spousal protections matter enormously if a husband or wife is still living at home.
