Yes. A nursing home resident's primary home is generally exempt from Medicaid spend-down, so the resident does not have to sell it to qualify.
Medicaid spend-down means reducing countable assets to a state limit, often $2,000 for aged and disabled applicants. The primary home usually does not count toward that limit. That rule matters for families facing dementia care because the house can remain while nursing home costs are covered.
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 Medicaid’s official study page — Use this page to check the study’s participation requirements.
- Apply through Justiceinaging’s official page — Use this page to review requirements and apply directly.
Table of Contents
- What the home exemption covers
- Does moving to a facility end the exemption?
- When home equity blocks coverage
- Why an exempt home can still face a state claim
What the home exemption covers
The exemption applies to the applicant's primary residence. Other countable assets, such as bank accounts and investments, still count toward the limit. The home itself stays outside that math when the basic conditions are met.
This protection is broad but not unlimited. High home equity can still block payment for long-term services and supports. Family occupancy and equity amount decide those edge cases.
Does moving to a facility end the exemption?
No, a move to a nursing facility does not automatically end the exemption. The resident keeps it by stating a subjective intent to return home. Applicants are commonly advised to answer yes on the intent-to-return question regardless of prognosis, according to Justice in Aging's analysis of the home-equity rule.
For dementia caregivers, this step deserves care. Record the answer on the application and keep a copy. If the state asks again, give the same clear statement and keep notes of who answered and when.
When home equity blocks coverage
For 2026, long-term services eligibility is denied when home equity exceeds $752,000, or up to $1,130,000 in twelve states plus D.C. with the higher limit, according to the same Justice in Aging analysis. Equity means home value minus debts tied to the home.
The cap does not apply when a spouse, child under 21, or blind or disabled child lives there. Starting in January 2028, the 2025 Budget Reconciliation Act sets a fixed national $1 million equity limit for Medicaid long-term services, except for agricultural-property homes. Before that law, federal rules set state limits between $730,000 and $1,097,000 with inflation adjustments, as described in KFF's analysis of the 2025 reconciliation law.
- Check current equity: market value minus mortgage and home-equity debt.
- Check who lives in the home: spouse, child under 21, or blind or disabled child.
- Check intent to return: answer and document it on the application.
- If equity is over the limit, ask an elder-law adviser about lowering equity through a lawful loan or sale.
Why an exempt home can still face a state claim
Exemption at application does not prevent later collection. States must pursue Medicaid Estate Recovery after death for nursing-home and related costs, but may not recover while a surviving spouse, child under 21, or blind or disabled child survives, according to the Centers for Medicare and Medicaid Services estate-recovery guidance.
That means planning has two parts: qualify now and limit recovery later. A resident over the equity limit may need to reduce equity through a home-equity loan or sale. Keep a copy of the intent-to-return answer and proof of who lives in the home with the Medicaid file.
