Authority: IC 12-15-1-10; IC 12-15-1-15; IC 12-15-21-2

Affected: IC 12-13-7-3; IC 12-15; IC 30-2-13

Sec. 3. (a) Pursuant to IC 12-15-2-17 and IC 30-2-13 and subject to subsection (c), if an applicant for or a recipient of Medicaid:

1. (1) establishes one (1) irrevocable trust that has a value of not more than ten thousand dollars ($10,000), exclusive of interest, and is established for the sole purpose of providing money for the burial of the applicant or recipient;
2. (2) enters into one (1) irrevocable prepaid funeral agreement having a value of not more than ten thousand dollars ($10,000); or
3. (3) owns one (1) or more life insurance policies with a combined face value of not more than ten thousand dollars ($10,000) and with respect to which provision is made to pay not more than ten thousand dollars ($10,000) toward the applicant's or recipient's funeral expenses;

the value of the trust, prepaid funeral agreement, or life insurance policy may not be considered as a resource in determining the applicant's or recipient's eligibility for Medicaid.

(b) Subject to subsection (c) and (d) and IC 12-15-3-7, if an applicant for or a member of Medicaid owns resources described in subsection (a) and the total value of those resources is more than ten thousand dollars ($10,000), the value of those resources in excess of the ten thousand dollars ($10,000) shall be considered as a resource in determining the applicant's or recipient's eligibility for Medicaid.

(c) Subject to subsection (d), if an applicant for or a member of Medicaid establishes an irrevocable trust or escrow under IC 30-2-13, the entire value of the trust or escrow may not be considered as a resource in determining the applicant's or individual's eligibility for Medicaid.

(d) In order for a trust, an escrow, a life insurance policy, or a prepaid funeral agreement to be exempt as a resource in determining an applicant's or a recipient's eligibility for Medicaid under this rule, the applicant or recipient must designate the office or the applicant's or recipient's estate to receive any remaining amounts after delivery of all services and merchandise under the contract as reimbursement for Medicaid assistance provided to the applicant or recipient after fifty-five (55) years of age. The office may receive funds under this subsection only to the extent permitted by 42 U.S.C. 1396p. The computation of remaining amounts shall be made as of the date of delivery of services and merchandise under the contract and must be the excess, if any, derived from:

1. (1) growth in principal;
2. (2) accumulation and reinvestment of dividends;
3. (3) accumulation and reinvestment of interest; and
4. (4) accumulation and reinvestment of distributions;

on the applicant's or recipient's trust, escrow, life insurance policy, or prepaid funeral agreement over and above the seller's current retail price of all services, merchandise, and cash advance items set forth in the applicant's or recipient's contract.

(Office of the Secretary of Family and Social Services; 405 IAC 2-4-3; filed Jun 11, 2021, 2:35 p.m.: 20210707-IR-405190602FRA; readopted filed Oct 8, 2025, 3:16 p.m.: 20251105-IR-405240502RFA)