Medicaid Planning gets treated like a mystery box. It is not. It runs on a specific set of rules about income, assets, and timing. Learn the rules and most of the mystery goes away. So does a lot of the sticker shock.
TL;DR — HERE IS THE SHORTER VERSION
- Medicaid eligibility comes down to three things: your monthly income, which assets count against you, and whether the person has a documented health need.
- Your home, one vehicle, and personal belongings usually do not count the way people fear. Bank accounts, investments, and a second property do.
- If you have modest savings, a long-owned home, and no recent gifts, your situation is probably simple. More than one property, a business, recent transfers, or a blended family means more to sort through. Most families land closer to simple than the marketing suggests.
- One very important consideration anytime there is a conversation about Medicaid: it may not be available despite all your planning. Indiana Medicaid is substantially underfunded, running a deficit, and regularly reducing available programs.
WHAT MEDICAID ACTUALLY COVERS
When people say Medicaid in the context of an aging parent, they usually mean one thing: help paying for long-term nursing home care. That care is expensive, and most families cannot cover it out of pocket for long. Medicaid can step in for people who qualify.
Medicare is a different program. It covers doctors, hospitals, and short rehab stays. It does not pay for long-term custodial care, the day-in, day-out help someone needs when they can no longer live on their own.
That gap is where Medicaid matters, and it is the reason families start reading about any of this in the first place.
INCOME LIMITS, IN PLAIN ENGLISH
Medicaid looks at what a person brings in each month. Social Security, a pension, and similar payments all count. There is a ceiling on how much monthly income a person can have and still qualify.
Being over that ceiling does not automatically end the conversation. Indiana has tools that can handle income that runs a little high. The point to hold onto is simpler than the rules: income is one of the two things the state looks at, and it is usually the more straightforward of the two.
ASSETS: WHAT COUNTS AND WHAT DOES NOT
This is where most of the real work lives, and where the phrase “asset protection” actually starts to mean something.
Medicaid sorts what you own into two piles. Countable and Non-Countable assets. Non-Countable assets are things like bank accounts, investment accounts, retirement accounts, and additional real estate. These count toward the limit. Non-countable assets are things the program sets aside, your primary residence up to a certain amount of equity, one vehicle, personal belongings, and a few others. These do not count against you the same way.
So protecting assets is not a product you buy off a shelf. It is the work of understanding which pile each thing falls into, and whether anything can reasonably move from one pile to the other under the rules. For one family that is a short conversation. For another it is a longer one. The difference is not about who hired the fancier lawyer or paying tens of thousands of dollars. It is about what they own and how they hold it.
If you are starting to look at Medicaid planning and the quotes feel all over the place, it is worth a calm conversation about what your situation actually needs. There is no charge for that first conversation, and you will leave with a clearer picture either way.
Call us at (219) 230-3600 or visit ccsklaw.com.
THE FIVE-YEAR LOOKBACK, EXPLAINED
When you apply, the state looks back at the five years before the application. This is the lookback. It checks whether assets were given away or sold for less than they were worth during that window.
The reason it exists is plain enough. The program does not want people handing everything to their kids the month before applying and calling themselves broke. It looks back, and gifts inside that window can create a delay before coverage starts.
Here is the part that gets lost in the noise. A clean five years, no large gifts, no bargain-sale transfers, can make an application easier. A recent gift does not ruin anything, but it does add a layer that has to be worked through. Knowing which situation you are in tells you a lot about how involved your planning will be before anyone quotes you a price.
THE HOME IS ITS OWN CATEGORY
The house does not behave like a bank account. It gets its own treatment under the rules, both while someone is alive and applying, and afterwards. We have written about how that plays out in more detail here: Can a Nursing Home Take My House. If the home is your main concern, start there. For this article, the thing to know is that the house is usually not the countable asset people fear it is.
WHERE YOU LAND: THE SIMPLE CASE OR THE COMPLICATED ONE
Once you understand income, assets, and the lookback, you can usually place your own situation before you ever sit down with anyone. Here is how to tell.
You are probably closer to the simple end if you have modest savings: a home you have owned for years, and nothing large given away or sold cheap in the last five years. A married couple with one house and one bank account, no recent gifts, is often a straightforward case.
You are probably closer to the complicated end if there is more than one property, a business, or a rental in the picture. Recent gifts or transfers push you in that direction too. So does a blended family, a second marriage, or children from different relationships, because titling and inheritance get more tangled. None of this is a problem. It just means there is more to sort through, and the plan takes more than a single meeting.
Most families are less complicated than they realize. The marketing around this topic makes things sound scarier than they are. That’s worth saying plainly. A lot of people pay for the complicated version when their situation never called for it.
MEDICAID – SORRY FOLKS THE PARK’S CLOSED
Much like when the Griswolds found Wally World closed after their long, expensive journey to California, many people are finding Medicaid is “not there” when they need it, after expensive Medicaid Planning. You can read more about Medicaid’s rapid, seemingly constant changes in this article, but here’s a quick summary:
In March 2024, Indiana Medicaid announced that it was a billion dollars – that’s $1,000,000,000 – in the hole for the 2023-24 fiscal year. That’s Indiana only, for one fiscal year, and with a quarter of the year left. In April 2024, they announced the reduction of several programs, the combining of others, and waitlisting of others.
Non-nursing home senior programs like the Home and Community Waiver program shifted to Indiana Pathways with for profit, managed care administrators (Anthem, Humana, United Healthcare), annual available slots per year were capped. They created a waiting list of up to 18 months, created alternative prioritization from other programs to cut to the front of the waitlist, and implemented other money-saving changes.
These are not things to improve care and the delivery of services. They are limitations on their availability. Additionally, the Providers have become more rigorous during redeterminations to find ways to cut people from programs even if the healthcare need has not improved.
Suffice to say, be careful putting too many eggs in a basket that may be carry the load.
WHAT TO DO NEXT
It is important to understand that planning for long-term care expenses is not an isolated conversation with an attorney. Also, there is no cookie-cutter plan that applies to your situation. Your financial advisor should be involved in the conversation before you start moving assets. The tax and penalty ramification could cost you substantially more than what an attorney may explain.
Your situation warrants asking questions from the professional advisors in your life. Your financial advisor, your accountant, and your attorney should be able to work together to make sure the proper plan is in place, not just to plan for a potential long-term care need, but also for the other spouse and family you want to provide your ideal quality of life.
COMMON QUESTIONS ABOUT MEDICAID PLANNING IN INDIANA
You start by understanding which of your assets count toward the limit and which do not. From there, planning is about whether anything can reasonably shift from the countable side to the non-countable side under the rules. There is no single product that does this. The right approach depends on what you own and how it is held.
When you apply, the state reviews the five years before your application to see whether assets were given away or sold for less than they were worth. Gifts inside that window can delay when coverage starts. A clean five years keeps an application simple.
Usually not while you are living in it and applying. Medicaid treats the home as its own category. Up to a certain amount of equity, it does not count against you the way a bank account does. What happens to the home afterwards is a separate question. We cover it in more detail in our article on whether a nursing home can take your house.
It depends on how complicated your situation is. A married couple with one home and one bank account and no recent gifts is a very different job than a family with multiple properties, a business, or transfers made in the last five years.
The majority of people do not need to spend $10,000 or more for “Medicaid Planning.” Be cautious of anyone quoting substantial fees without explaining the real purpose, need, and what the long-term impact on your taxes and availability to use the assets if you don’t need long-term care for years.
Many families do not. A trust is one tool among several, and it fits some situations and not others. Whether it makes sense for you depends on your assets, your timeline, and your family circumstances, not on it being sold as the default answer.
Have a question that is not here? There is no charge for that first conversation. Call us at (219) 230-3600 or visit ccsklaw.com.