Starting January 1, 2028, countable home equity above $1 million disqualifies you from Medicaid nursing-home coverage. Countable equity means your home's fair-market value minus mortgages, liens, and other debts secured by your main residence. The rule comes from Section 71108 of the 2025 budget reconciliation law signed July 4, 2025, as described in KFF's reconciliation tracker. For families facing dementia, it makes the house itself part of eligibility planning.
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 Kff’s official study page — Use this page to check the study’s participation requirements.
- Check eligibility on Justiceinaging’s official study page — Use this page to check the study’s participation requirements.
Table of Contents
- Who must meet the $1 million limit?
- How does the rule change in 2028?
- How is your home equity counted?
- When does the cap not apply?
- What should families over the limit do?
Who must meet the $1 million limit?
The cap applies to older adults and people with disabilities seeking Medicaid long-term services and supports. That includes both nursing-facility care and home- and community-based services.
If countable equity exceeds the limit, Medicaid denies LTSS coverage. Families then pay privately until countable equity falls within the allowed amount.
How does the rule change in 2028?
Before 2028, federal law sets an inflation-indexed range by state. According to Justice in Aging, limits were $730,000 to $1,097,000 in 2025 and $752,000 to $1,130,000 in 2026, with most states using the $752,000 base, in its April 2026 analysis.
Starting in 2028, every state uses the same $1 million ceiling. The ceiling is fixed with no inflation adjustment, so high-limit states such as California, New York, and Massachusetts drop from $1.13 million to $1 million.
How is your home equity counted?
Only equity in your principal residence counts. Subtract mortgage balances, home-equity loans, liens, and other debts secured by that home from its current fair-market value.
A $1,150,000 house with a $250,000 mortgage has $900,000 in countable equity and stays under the cap. A paid-off $1,150,000 house has $1,150,000 in countable equity and exceeds the cap.
When does the cap not apply?
The cap does not apply when a spouse lives in the home. It also does not apply when a child under 21 or a blind or disabled child lives there.
Homes on agricultural property are also excluded. Federal regulators must offer a waiver when the rule would cause demonstrated hardship.
What should families over the limit do?
Remember that $1 million is only a ceiling. According to a Russo Law Group elder-law advisory, states may keep lower limits, saying you plan to return home does not excuse excess equity, and owners above the cap must reduce countable equity or pay privately, in its Medicaid update.
- Get a current market valuation and mortgage payoff statement.
- Ask your state Medicaid office for its exact equity limit and hardship-waiver rules.
- Talk with an elder-law attorney before selling, gifting, borrowing, or transferring the home.
