Understanding the Impact of Potential Medicaid Cuts on Long-Term Care for Indiana Seniors

As Indiana elder law attorneys, we work every day with families navigating the difficult and often emotional realities of long-term care in assisted living and nursing homes. For many of our clients, one truth becomes clear very quickly: nursing home care is

Protect Your Assets Before It's Too Late

incredibly expensive — and most people can't afford it without help. In Indiana, 52% of nursing home residents rely on Medicaid to pay for their care. That number isn’t just a statistic — it represents real families who spent their life savings trying to stay independent before finally qualifying for the safety net Medicaid provides. But now, Medicaid is under political threat.

What Medicaid Cuts Might Take Place?

Congress is considering proposals that would:

• Cut federal Medicaid funding to states, or

• Tighten eligibility rules that could make it harder to qualify.

Experts warn that real benefits could be on the chopping block — especially for older adults in nursing homes or in need of that level of care in the near future.

In 18 states, Medicaid pays for more than 60% of nursing home residents. In states like West Virginia, it’s as high as 78%. If cuts go through, many facilities — especially those already stretched thin — could be forced to scale back services, reduce staff, or close altogether.

Understanding the Odds: Will You Need Long-Term Care?

According to national data:

• The average annual cost of a nursing home stay is over $111,000.

• Nearly 70% of people age 65 and older will need some form of long-term care.

• Medicare does not cover custodial care — which is the day-to-day help most nursing home residents need.

This is one of the biggest misconceptions we hear: “I have Medicare — that will pay for the nursing home, right?” No, not for long-term care.

Medicare vs. Medicaid: Know the Difference

Medicare

• Covers short-term skilled nursing after a hospital stay (up to 100 days).

• Does not cover long-term “custodial care” (help with bathing, dressing, etc.).

• After day 100, you’re on your own even though the Indiana Department of Insurance reports that the average length of stay in a nursing home in our state is approximately 2.6 years.

Medicaid

• Pays for long-term care if you qualify financially.

• Covers custodial care and many services Medicare doesn’t.

• Requires you to spend down most of your assets to become eligible.

What Can Families Worried about Medicaid Cuts Do Now?

Medicaid planning isn’t just for the poor. It’s for anyone who doesn’t want to lose their life savings paying for long-term care.

Here’s what we recommend:

1. Start Early Planning ahead

1. ideally five years before you need care

2. allows you to protect more assets through trusts and other strategies.

2. Understand Medicare Does Not Cover Long Term Care

   1. Make sure you and your family understand what is and isn’t covered by Medicare so you're not caught off guard.

3. Consider Long-Term Care Insurance

a. It’s not right for everyone, but in the right circumstances, it can preserve independence and avoid crisis-level decisions.

b. Factors such as health issues and inability to pay the premiums prevent many people from getting long term care insurance.

4. Plan Ahead

   1. As elder law attorneys, we regularly help people who are already in a nursing home - or will be shortly; however, it's always best to plan ahead.

   2. Various strategies can be used to help protect your assets, such as trusts, family care contracts, and asset reallocation.

The Political Reality

Medicaid allows Americans to receive essential care, but the current proposals in Washington could push more of the financial responsibility to states. If that happens, Indiana may be forced to reduce benefits, tighten eligibility, or freeze enrollment — all of which could drastically limit access to assisted living and nursing home care.

Final Thoughts

If you're in your 60s or 70s — or helping a parent who is — this is the time to plan. Don’t wait for a medical crisis or a government policy change to figure out how you’ll pay for care. And understand that Medicare won't carry you through. We’re here to help you create a roadmap that protects your dignity, your health, and your family’s financial future — no matter what happens in Washington.

Want to talk about your long-term care plan? 📞Call our office at 260-440-3241 to schedule a consultation today. We're here to answer your questions, protect your nest egg, and give you peace of mind.