Navigating Long-Term Care in Indiana

As an original partnership state, Indiana offers both total asset protection and dollar-for-dollar asset protection options protecting residents' assets from the high costs of long-term health care. 

Quality care options are available statewide, and several insurance solutions are available to address the financial impact of future long-term care.

However, rapidly increasing costs for care services are becoming burdensome on Indiana residents and their families for those who do not have Long-Term Care Insurance.

There are a wide variety of care options available in Indiana for those who require long-term health care services, including 

• adult day care centers
• assisted living facilities
• continuing care retirement communities
• home health care providers
• memory care facilities
• rehabilitation facilities
• traditional nursing homes

Top insurance companies have several insurance options to help residents safeguard income and assets, protect lifestyles, and preserve a legacy. Plus, policyholders will have access to quality care options giving loved ones the time to be family instead of caregivers.

There are also tax incentives available for those who pruchase qualified Long-Term Care Insurance.

Federal Partnership Program

The State of Indiana was one of the four original partnership states. The Indiana Long-Term Care Insurance Partnership Program (ILTCIP) is a special program. It combines private long-term care insurance with special access to Medicaid. The private long-term care insurance companies must offer a specific level of benefits to allow policyholders to qualify for additional asset protection

Indiana’s program is unique as it provides options for both ‘total dollar’ asset protection and ‘dollar-for-dollar’ asset protection.

Effective April 1, 2009, Indiana was approved by the federal government to join the National Reciprocity Compact for granting Medicaid asset protection to policyholders from other states that have Partnership long-term care programs. Indiana Partnership policyholders who relocate to another state may be eligible to receive dollar for dollar asset protection if applying to that state’s Medicaid program.

The insurance policy benefits are payable in any state where you reside.  But now with Indiana participating in the Reciprocity Compact, the asset protection benefit in your Indiana Partnership policy will be honored by other states.

Policy Example

With "total dollar" asset protection the policy would provide for 100% asset protection. With this policy, if you exhaust benefits in the policy you are able to protect every asset you have. With a "dollar-for-dollar" policy, you shelter your estate based on the amount of total benefits paid by the policy. For example, if your policy paid $450,000 in benefits you would be able to shelter $450,000 and still qualify for the Medicaid benefit.

Reciprocity

Most states have reciprocity with other states' long-term-care partnership programs including Indiana. This means if you move from or to Indiana your partnership asset protection follows you as well.

Medicaid

Healthy Indiana Plan is the Medicaid program in Indiana. The Indiana Medicaid program will pay for long-term health care if an individual has little or no income and assets. The Long-Term Care Medicaid spend down is $2,000.  A spouse’s minimum asset allowance is a minimum of $27,480 up to a maximum of one-half of countable assets up to $137,400.  Your spouse’s minimum monthly income allowance is $3,435.* The home equity limit is $636,000.

For more information about the Medicaid program visit www.medicaid.gov.

Indiana Medicaid Estate Recovery Program

When a person applies for the Medicaid program for long-term care services and supports in Indiana, they should understand the state is required to place liens on the home property of Medicaid recipients who receive long-term care services and supports. 

Medicaid Estate Recovery is how the State of Indiana seeks to recover money paid by Medicaid for the long-term health care services of the individual who received the care. 

Following the death of the care recipient, the deceased's assets are used to reimburse the taxpayers for the long-term health care provided through Medicaid. The estate is subject to the Medicaid Estate Recovery Program, otherwise known as MERP.

Indiana is required by federal and state law to seek recovery from the estate. The recovery will be for the amount of Medicaid payments made on behalf of the recipient to reimburse the state for the cost of their long-term health care. 

Medicaid recipient's house and real estate may be subject to estate recovery. Indiana can place a lien on the estate up to the value of the Medicaid benefits paid. If there is no estate, recovery may be made against the estate of your spouse. Recovery will not be made until after the individual's death and that of a surviving spouse, whichever is later.

The state will recover the cost of long-term care services if assets remain in the estate at the time of death. Indiana is an expanded estate recovery state meaning the state can seek assets that do not go through probate. Expanded recovery means the state can seek reimbursement through assets held by the surviving spouse, life estates, and assets in a living trust. There are some limitations in certain situations.

Remember that an estate includes all real and personal property (homes, land, vehicles, cash, bank accounts) held individually or jointly. All deceased assets are subject to recovery, including holdings in most trusts.

Indiana can place a lien on real estate. Also, it is essential to note that a penalty might be applied if there was a transfer of real or personal property without adequate consideration, meaning for less than fair market value.

The state may "look back" up to 60 months before application for Medicaid long-term care services to determine when income was reduced and resources were transferred.

Remember, Indiana's Medicaid program will provide long-term care services only if you have little or no income and assets. However, the state will never require a living spouse to move out of their home. 

If a person had a qualified Partnership Long-Term Care Insurance policy, the total amount of benefits paid by the policy would be sheltered from asset recovery. 

 State Resources for Aging and Long-Term Care in Indiana

There are a variety of state resources available in Idaho to help residents and their families with issues of aging and long-term health care. Many of these services benefit low-income families. 

• Indiana Area Agencies on Aging AAA - 800-986-3505

Indiana's Area Agencies on Aging (AAA) has 15 offices throughout the state helping seniors and their families. AAA provides case management, information, and referrals to various services for persons getting older and needing assistance. 

Indiana's Area Agencies on Aging offers numerous services for older adults in the state. AAA offers case management for seniors who need long-term care health care services. The agency provides information on financial assistance and referrals for programs available throughout Indiana. 

• Indiana Long-Term Care Ombudsman - 800-622-4484

The Indiana Long-Term Care Ombudsman program promotes and protects the residents of long-term care facilities and ensures their rights under federal and state law are being protected.

If a resident's rights are violated, the Indiana Long-Term Care Ombudsman will protect the resident. The Ombudsman's Office advocates for residents who are in long-term care facilities. The office will negotiate on behalf of the resident to ensure quality care and address concerns about the use of chemical or physical restraints, transfer and discharge, abuse, and other aspects of resident rights. Family members, friends, and residents can contact the office to get help if their rights have been violated.

• Indiana State Health Insurance Assistance Information SHIP - 800- 452-4800

The State Health Insurance Assistance Program (SHIP) is a free and impartial counseling program for people with Medicare. The program is not affiliated with any insurance company but is offered by the state through the Administration on Community Living and the Indiana Department of Insurance. 

Indiana SHIP provides unbiased health insurance assistance for seniors and others who receive Medicare so those with Medicare can maximize their use of Medicare and Medicaid (if they qualify). There is no charge for this assistance. 

• Options Counseling and Medicaid Services - 317-803-6131

One-on-one counseling for Medicaid-eligible individuals about available health care benefits and long-term services and supports offered through CICOA. 

This free service provides seniors with Medicaid counseling to help them understand their payment options for nursing home care or other care choices. It also helps seniors and their families know if they're eligible for Medicaid subsidized care.

Products Approved in Indiana

A variety of products are approved in Indiana for Long-Term Care planning. These include traditional plans, including partnership certified policies, short-duration policies, and asset-based “hybrid” plans.

Tax Incentives

The State of Indiana also offers state tax incentives. This tax deduction applies only to Indiana Partnership Policies. An individual taxpayer is permitted to deduct an amount equal to the eligible portion of premiums paid during the taxable year by the taxpayer for a qualified LTC insurance policy (as defined in the Indiana Code) for the taxpayer, the taxpayer’s spouse, or both. The deduction only applies to the Partnership program. Ind. Code § 6-3-1-3.5 and § 12-15-39.6.5 (Qualified Long-Term Care Policy).

Reverse Mortgages in Indiana

Reverse mortgages are available in Indiana. A reverse mortgage is a home equity loan where the borrower does not have to make payments.

This type of mortgage can increase monthly income, eliminate mortgage payments, and even fund Long-Term Care Insurance. However, Indiana has many rules on these products, and you should seek the help of a qualified and licensed mortgage broker. 

If you have significant equity in your home and you and your spouse are at least 62 years old, you can get a reverse mortgage to turn your equity into funding long-term health care, pay for an LTC Insurance policy, pay bills and add to your retirement lifestyle.

The home must be the principal residence without any tax liens. 

Learn more about reverse mortgages by clicking here.

_{*The federal government sets a new minimum and maximum amounts each year, but states can set their own minimum requirements at any level between the federal limits. This information is based on the best available sources.}