Assisted living waivers do not bypass home-equity rules; they must meet them. A Section 1915(c) waiver is a state Medicaid option that funds assisted living and other community services. According to KFF, these waivers can cover assisted living for people who would otherwise need institutional care in KFF's overview of Medicaid home care.
For families facing dementia, this link guides planning. Assisted living may look separate from nursing-home Medicaid. It is not separate for long-term-care financial eligibility. Home value alone can block waiver approval even when care need is clear.
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.
Table of Contents
- What Does an Assisted Living Waiver Decide?
- How Is Home Equity Counted?
- What Changes in 2028?
- What Can Families Do Now?
What Does an Assisted Living Waiver Decide?
The waiver decides where care happens, not whether finances pass. It lets a qualifying person receive support in assisted living rather than in a nursing facility. Medical need for facility-level care remains required.
It does not waive financial tests. Justice in Aging reports that equity above the state limit disqualifies applicants from both nursing-facility care and home and community-based services in Justice in Aging's analysis of the equity disqualification. Families should treat care approval and financial approval as two separate gates.
How Is Home Equity Counted?
Justice in Aging describes home equity as fair-market value minus mortgages and liens. The home is normally exempt as a principal residence when the applicant intends to return. A simple example helps: a $360,000 home with a $120,000 mortgage has $240,000 in counted equity.
The state limit then controls the result. Equity below the limit keeps this test passed. Equity above the limit blocks Medicaid long-term services and supports, including waiver services.
- Find fair-market value, mortgage balances, and liens.
- Subtract loans and liens from value to estimate equity.
- Compare the result to your state's current adopted limit.
What Changes in 2028?
Beginning in January 2028, Medicaid will bar payment for long-term services and supports when non-agricultural home equity exceeds $1,000,000. Justice in Aging summarizes this national cap in Justice in Aging's summary of the 2028 limit. It will replace the current state-by-state floor-and-ceiling approach for affected homes.
For dementia planning, the date matters more than the number. A family with substantial equity may qualify under a higher state limit now and face denial later. Do not assume today's approval guarantees future waiver years.
What Can Families Do Now?
Check equity before choosing a waiver path. Gather a recent value estimate, mortgage statements, and lien records. Ask the state agency which limit applies to the application year.
Also check who lives in the home. The federal Medicaid statute published by Cornell's Legal Information Institute provides that no equity limit applies when a spouse, child under 21, or blind or disabled child lives there in the federal Medicaid statute. That protection can preserve eligibility where it fits. Call the state Medicaid agency before signing an assisted-living contract and ask how your equity and household affect waiver eligibility.
- Confirm intent-to-return rules for the absent homeowner.
- Document a qualifying spouse or child in the home.
- Track equity changes before renewal, sale, payoff, or new borrowing.
