Starting Jan. 1, 2028, Medicaid will not pay for long-term nursing-home or home-based care if a single applicant's non-farm home equity tops $1 million. For dementia planning, a high-value house can block eligibility even when income and other assets qualify.
Home equity means market value minus mortgages and liens. Congress added the fixed cap in Section 71108 of the 2025 budget-reconciliation law known as H.R. 1, signed July 4, 2025, according to the ElderLawAnswers summary.
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Table of Contents
- How the $1 million rule works
- Who faces the biggest change
- Who the cap does not cover
- What should families do now
How the $1 million rule works
Starting Jan. 1, 2028, state Medicaid programs may not pay for long-term services and supports for applicants above the cap.
Those services include both nursing-facility care and home- and community-based services, according to the Justice in Aging analysis. The $1 million ceiling is fixed and will not rise with inflation. It replaces the current system where federal limits adjust each year and states pick a limit within the federal range.
Who faces the biggest change
Twelve states plus D.C., including New York and California, now use the federal maximum. For 2026 that maximum is $1,130,000, compared with a $752,000 federal base, Justice in Aging reports.
Homeowners in those high-limit states will face a lower cap in 2028. Single nursing-home applicants in high-cost housing markets are most exposed.
Who the cap does not cover
The cap does not apply when a spouse lives in the home. It also does not apply when a child under age 21 lives there, or a blind or disabled child of any age.
Homes on land zoned for farm use are exempt and stay under the older inflation-adjusted state rules, according to the Russo Law Group review. States may also keep home-equity limits below $1 million, so a lower state limit still controls where one exists.
What should families do now
Families expecting a dementia diagnosis to lead to Medicaid care should learn current equity now. Countable equity is appraised value minus secured debt, not the purchase price or tax assessment.
Practical planning before 2028 can include: Single applicants above $1 million in non-farm equity must reduce countable equity or make other payment plans before they need care, the Farr Law Firm advises. Do not wait until after nursing-home entry, when options narrow.
- getting a realistic valuation and mortgage-payoff statement
- asking the state Medicaid agency for its current equity limit
- talking with an elder-law attorney about lawful equity reduction, sale, or other eligibility plans
- coordinating housing and care choices before a crisis admission
