As you grow older, the need for long-term care becomes increasingly probable, especially for married couples because there is double the likelihood that one of you will need care. The cost of that care can be overwhelming, often exceeding what most families can comfortably pay out of pocket. Medicaid can be a crucial resource when it comes to covering long-term care costs, but qualifying for Medicaid involves strict income and asset rules. These rules can raise serious concerns for married couples who fear that the spouse remaining at home, referred to as the “community spouse,” may be left with insufficient resources. As the Indianapolis attorneys at Frank & Kraft explain, however, Indiana Medicaid includes spousal impoverishment rules to protect a community spouse.
Why Medicaid May Become Necessary in Indiana
Most seniors expect Medicare to handle their health care expenses in retirement; however, Medicare does not pay for long-term care in a nursing home or similar setting. Private insurance policies typically exclude this kind of care as well. With the annual cost of nursing home care in Indiana averaging over $120,000 (as of 2024), the financial burden can be significant. Medicaid does cover these expenses, but it is a need-based program. When one spouse applies for long-term care Medicaid, both spouses’ assets and income are reviewed. That is where Indiana’s spousal impoverishment rules come into effect, helping to ensure the community spouse is not left in financial distress.
The Role of the Community Spouse Resource Allowance (CSRA)
The Community Spouse Resource Allowance, or CSRA, is a key part of Indiana’s effort to prevent the impoverishment of the non-applicant spouse. The CSRA outlines how much the community spouse is permitted to retain in countable resources while still allowing the other spouse to qualify for Medicaid.
In 2025, Indiana allows the community spouse to keep half of the couple’s combined countable assets, up to a maximum of $157,920. If the non-applicant’s half of the assets is under $31,584, 100% of the assets, up to $31,584 can be kept by the non-applicant. This ensures a basic level of financial stability for the spouse who remains in the community. Countable assets typically include checking and savings accounts, CDs, investment accounts, and certain retirement savings; however, not everything is counted. For example, the couple’s primary residence may be excluded under certain conditions, as well as one vehicle and most personal items. The family home remains a protected asset if the community spouse continues to live there. If no spouse or eligible dependent lives in the home, Indiana imposes a home equity interest limit of $730,000 as of 2025. Exceeding this limit may jeopardize Medicaid eligibility for the applicant spouse.
Monthly Maintenance Needs Allowance (MMNA) in Indiana
Another vital protection for the community spouse is the Monthly Maintenance Needs Allowance (MMNA), also known in Indiana as the Minimum Monthly Maintenance Needs Allowance (MMMNA). This provision ensures that the community spouse is not left with too little income to meet essential living expenses.
In 2025, Indiana allows the community spouse to retain at least $2,555 in monthly income. If the community spouse earns less than this amount, they may receive a portion of the institutionalized spouse’s income to meet that threshold. This transfer is allowed so that the community spouse can continue paying for necessities like housing, utilities, and food without falling into poverty due to their spouse’s medical needs.
If the community spouse already has income exceeding $2,555 per month, they will not be eligible for a MMMNA. In Indiana, a non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $767 / month (effective 7/1/24 – 6/30/25). A Spousal Income Allowance, however, cannot push a non-applicant’s total monthly income over $3,948.
Why Spousal Impoverishment Rules Matter
Without these protections, many healthy spouses would be left in dire financial circumstances, potentially forced to spend down nearly all the couple’s resources to qualify their spouse for long-term care coverage. Indiana’s spousal impoverishment rules aim to strike a balance by allowing the ill spouse to receive necessary care without depriving the other spouse of their dignity, housing, or financial security.
Do You Have Additional Questions about the Indiana Medicaid Spousal Impoverishment Rules?
For more information, please join us for an upcoming FREE seminar. If you have additional questions about the 2025 Indiana Medicaid spousal impoverishment rules, contact the experienced Indianapolis Medicaid planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
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