If a dementia patient owns a non-farm home with more than $1 million in equity, Medicaid cannot pay for long-term care January 1, 2028. The patient is denied nursing-facility and home-based coverage until countable equity drops below the cap. Long-term services and supports, called LTSS, means nursing-home stays and home-based help with daily care.
Justice in Aging reports that the Budget Reconciliation Act of 2025 creates this bar in Justice in Aging analysis. Older adults seeking Medicaid long-term care must generally hold about $2,000 or less in countable assets. Equity in a main home does not count, except for this home-equity limit.
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 Jbiznews’s official study page — Use this page to check the study’s participation requirements.
- Read the official guidance from Justiceinaging — Use this primary source to verify the official guidance.
Table of Contents
- Why dementia care often meets this limit
- How does the 2028 cap compare to today?
- Whose home stays protected?
- What if equity is over $1 million?
Why dementia care often meets this limit
Dementia often requires months or years of custodial nursing-home care. Medicaid pays for that care only when financial tests are met. Home equity above the cap blocks payment even when other assets are low.
The $1 million figure does not mean a luxury home. JBizNews describes how a $1 million house in New York City or San Francisco may be a modest two- or three-bedroom bought 40-50 years ago for $50,000 or less in JBizNews report. Middle-class patients needing custodial nursing-home care can therefore exceed the cap.
How does the 2028 cap compare to today?
For 2026, Justice in Aging puts the federal limit at $752,000, with state choice up to $1,130,000. Twelve states plus D.C., including California, New York, Massachusetts and New Jersey, use the maximum. The 2028 law replaces that flexible system with a single $1 million ceiling for non-farm homes.
Unlike prior limits indexed to inflation since 2011, the 2028 ceiling is frozen with no future adjustment, Berger Estate and Elder Law explains in Berger Estate and Elder Law summary. As prices rise, more homeowners will cross it. Families planning five or ten years ahead cannot rely on the threshold moving.
Whose home stays protected?
The limits do not apply if the home is occupied by a spouse, a child under 21, or a blind or disabled child of any age. Justice in Aging lists these household exceptions.
Check who lives in the home before assuming the cap applies. Ask these checks during care planning. A yes to any one can remove the cap.
- spouse lives in the home
- child under 21 lives in the home
- blind or disabled child of any age lives in the home
- home sits on agricultural property exempt from the 2028 ceiling
What if equity is over $1 million?
Applicants over the cap are denied Medicaid long-term-care coverage and must reduce countable equity. Berger Estate and Elder Law warns that moving the house into an irrevocable trust or life estate to get below $1 million triggers the five-year look-back penalty. That transfer can create months of ineligibility.
Even when home equity allows approval, the house may face later recovery. Federal law requires states to recover nursing-facility, home-based, and related hospital and drug costs from estates of beneficiaries age 55 or older, KFF explains in KFF explainer. A home exempt during life can become a post-death recovery target.
