Seniors who own a home often worry about whether their property might put their Medicaid eligibility at risk, especially when they need long-term care like nursing home services. The relationship between homeownership and Medicaid eligibility is complex but understanding the key rules can help seniors and their families plan effectively.
Medicaid is a government program designed to help low-income individuals, including seniors, pay for healthcare and long-term care services. To qualify, applicants must meet strict financial limits on income and assets. However, the rules treat a primary residence differently from other assets. Generally, **a senior’s primary home is considered an exempt asset**, meaning its value is not counted against Medicaid’s asset limits, provided certain conditions are met.
One of the most important conditions is the **home equity limit**, which varies by state but typically ranges from around $636,000 to over $1 million. If the equity in the home (the market value minus any mortgage or debt) is below this threshold, the home is usually exempt from Medicaid asset calculations. This means seniors can own a home without automatically losing Medicaid eligibility, as long as the equity stays under the state’s limit.
Another key factor is the **“intent to return” rule**. If a senior moves into a nursing home but plans to return home, they can submit a written statement declaring this intent. This declaration allows Medicaid to continue exempting the home as an asset for a limited time, often up to six months or longer depending on the state. During this period, the home is protected from being counted as an asset that could disqualify the senior from Medicaid. However, if the senior does not return within the allowed timeframe, the home may then be considered a countable asset, potentially jeopardizing Medicaid eligibility.
If a senior sells their home, the proceeds from the sale become countable assets. Since Medicaid has very low asset limits—usually $2,000 for a single person and $4,000 for a married couple—these proceeds can quickly push a senior over the limit, making them ineligible for Medicaid unless they spend down the money on exempt items like paying off debts or prepaying funeral expenses.
Maintaining a home while on Medicaid can also be financially challenging. Even with the “intent to return” status, seniors must continue paying property taxes, insurance, and upkeep costs. Medicaid beneficiaries typically must contribute most of their income toward care costs, leaving only a small personal needs allowance. Some states allow a home maintenance allowance to help cover these
