If you have both Medicare and Medicaid and need nursing home care, the home equity cap can block Medicaid payment for that care when your ownership interest in your home is above your state limit. Dual eligibles are people who qualify for both programs, and the cap applies to Medicaid long-term services and supports.
The limit now varies by state. According to Justice in Aging, the 2026 federal floor is $752,000, with some states electing up to $1,130,000, and a $1 million national ceiling starts Jan. 1, 2028 under the Budget Reconciliation Act of 2025 Justice in Aging analysis.
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
- Why Medicare alone will not cover custodial care
- Who is at risk of losing Medicaid payment
- When the cap does not apply
- What families should verify now
Why Medicare alone will not cover custodial care
Medicare does not pay for non-medical long-term custodial care in nursing homes or the community. According to the Centers for Medicare and Medicaid Services, Medicaid can cover that care only when state eligibility rules are met Medicare long-term care coverage.
That gap matters for dementia care. An extended nursing home stay for supervision, help with daily tasks, and safety often falls on Medicaid, not Medicare.
Who is at risk of losing Medicaid payment
The people at risk are adults 65 and older and people with disabilities, including dual eligibles needing extended nursing home stays. According to Justice in Aging, the concern centers on applicants whose countable assets are otherwise low but whose home equity exceeds their state cap Justice in Aging analysis.
Think of a widow with modest savings and a paid-off house in a high-cost market. Her income and bank accounts may fit Medicaid rules, yet her equity interest alone can disqualify her from long-term services coverage.
When the cap does not apply
No equity cap applies when a spouse lives in the home. The same exception covers a child under 21 and a blind or disabled child of any age who lives there.
Another limit concerns farm homes and hardship. The 2028 $1 million ceiling does not apply to homes on agricultural property, and states must offer a way to seek a waiver for undue hardship. West Virginia's Medicaid State Plan gives one example of that state-level waiver process West Virginia Medicaid State Plan supplement.
What families should verify now
An applicant over the limit is ineligible for Medicaid long-term services until equity is reduced. Families should confirm the exact state figure in Supplement 17 to Attachment 2.6-A of their state Medicaid plan.
Most states use $752,000, while twelve states plus D.C. use $1,130,000. Ask the state Medicaid agency for the current Supplement 17 figure, whether a household member triggers an exception, and how to request a hardship waiver.
