The home equity cap is Medicaid's limit on countable home value for long-term-care coverage. In New York, a nursing-home applicant with countable equity above $1,130,000 is ineligible for nursing-facility Medicaid payment. New York uses the federal maximum of $1,130,000 effective Jan.
1, 2026, according to the NY State Dept. of Health in its 2026 levels notice. For dementia families, the rule matters at placement time. A high-value home can delay approval even when care needs are 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.
Official resource:
- Read the official guidance from Ny — Use this primary source to verify the official guidance.
Table of Contents
- Does the cap affect all Medicaid?
- How is equity counted?
- When does the home stay exempt?
- What can families over the limit do?
- Does staying under the cap protect the house?
Does the cap affect all Medicaid?
No. The cap applies to nursing-facility and community-based long-term-care applicants. It does not block standard community Medicaid for people not seeking those services, according to LegalClarity.
That distinction helps families plan. A spouse at home may still use regular community coverage while the nursing-home application faces an equity issue. The long-term-care request gets separate treatment.
How is equity counted?
Home equity means current fair-market value minus mortgages and liens, according to LegalClarity. Only countable equity is compared to the state limit.
For example, a $1,300,000 home with a $250,000 mortgage has $1,050,000 in equity. That amount falls below the New York limit. A $1,300,000 home with no mortgage exceeds it.
When does the home stay exempt?
The cap does not apply when a spouse, child under 21, or blind or disabled child of any age lawfully lives in the home, according to the American Council on Aging in its home-exemption guide. The home is then exempt regardless of equity.
A New York applicant can also keep the home exempt while living there or by stating an intent to return, according to the Law Offices of Albert Goodwin. That test is subjective and often satisfied by a written statement. Families should put intent in writing early, especially after a dementia-related move.
What can families over the limit do?
Families above $1,130,000 without an exempt resident face four practical paths, according to the Davies Law Firm. The options are reduce countable equity, document an exception, seek undue-hardship relief, or pay privately until eligible.
Act before filing when possible. A rushed application can create a denial that disrupts placement.
- Measure equity with an appraisal and current loan statements
- Document who lives in the home and their exempt status
- Ask an elder-law attorney about lawful equity reduction and hardship rules
- Keep paying for care privately while eligibility is resolved
Does staying under the cap protect the house?
Not fully. Staying under the cap does not prevent liens or estate recovery. Under 42 U.S.C.
§1396p(a), New York may place a lien on an institutionalized person's home after notice and a hearing of no expected return, as described by FindLaw in the federal Medicaid lien statute. Recovery is deferred while a spouse or qualifying relative lives there. Families should keep proof of residence, marital status, age, or disability for anyone claimed as an exempt resident.
