No, the $1 million home equity cap does not change Medicare eligibility or Medicare-covered medical care for people with dementia. It can block Medicaid payment for long-term care for Medicare recipients who also rely on Medicaid after Jan.
1, 2028. Long-term services and supports means ongoing care such as nursing-facility care and home- and community-based services. People with both programs, called dually eligible enrollees, use Medicare for medical care and Medicaid for long-term care.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Official resources:
- Check eligibility on Medicare’s official study page — Use this page to check the study’s participation requirements.
- Read the official guidance from Medicare — Use this primary source to verify the official guidance.
Table of Contents
- What changes in 2028?
- Why does Medicare stay the same?
- Who with dementia faces risk?
- What exceptions and early steps matter?
What changes in 2028?
Congress created the rule in the Budget Reconciliation Act of 2025. According to Justice in Aging, Medicaid programs cannot pay for long-term services and supports when home equity exceeds $1 million starting Jan. 1, 2028 Justice in Aging explainer on the 2028 home-equity limit.
The flat cap replaces an inflation-indexed system. According to Justice in Aging, the 2026 federal base limit is $752,000 and states may elect up to $1,130,000 Justice in Aging summary of the current indexed limits. For example, a homeowner with $900,000 in equity may qualify in a state with a high current limit. That same level would still qualify under the $1 million cap, while $1.2 million in equity would not after 2028.
Why does Medicare stay the same?
Original Medicare does not pay for non-medical long-term care. According to Medicare, it does not cover custodial nursing-home care when that is the only care needed and covers only qualifying short-term skilled care Medicare guidance on nursing-home coverage.
That gap is why many families turn to Medicaid for memory care and nursing care. The new cap leaves Medicare rules unchanged and tightens one Medicaid path to that care.
Who with dementia faces risk?
People at risk are dually eligible enrollees who need long-term care, a group that includes many people with dementia. According to Justice in Aging, some duals in 12 states plus D.C. already hold equity above $1 million Justice in Aging analysis of dual-eligible impacts.
Those households could lose Medicaid for long-term care or face selling to qualify. Dementia often creates long stays in memory care or a nursing facility. When Medicare does not cover that custodial stay, Medicaid is the payer the cap affects.
What exceptions and early steps matter?
Justice in Aging notes key limits on the rule. The cap does not apply when a spouse, a child under 21, or a blind or disabled child lives in the home. It also excludes homes on agricultural-zoned land, with a hardship-waiver process required.
High-equity homeowners with dementia who expect to need Medicaid-paid memory care or nursing care after 2028 need earlier planning. Justice in Aging points to lower countable equity, waivers, or other payment sources as options. Start that review while there is time to act, not during a crisis move to memory care.
- Check countable home equity well before 2028.
- Ask the state Medicaid agency about hardship waivers and exempt household members.
- Line up other payment sources if Medicaid long-term care may be denied.
