How Your Home May Impact Long-Term Medicaid

Q: Is my house exempt if I or my spouse need long-term care Medicaid?

A: Depending on the type of Medicaid one is applying for, under certain circumstances one’s primary residence will be exempt for purposes of determining Medicaid eligibility. However, certain events can cause the home to lose its exempt status, and even if the home is disregarded for eligibility purposes Medicaid still may be able to place a lien on the property to recover the value of services provided.

There are two basic types of Medicaid that will pay for long-term care: Chronic Medicaid is the program that covers nursing home care and Community Medicaid covers care at home, such as personal home-care aids. For 2023, an individual applying for either Chronic or Community Medicaid can have no more than $30,182 in assets; as to income, a Chronic Medicaid applicant can have no more than $50/month while a Community Medicaid applicant is allowed $1,677/month (although a pooled income trust can be used to preserve excess income).

Medicaid exempts certain resources from this $30,182 asset allowance, namely the homestead, which Medicaid defines as the primary residence occupied by the applicant, the applicant’s spouse, or the applicant’s minor, disabled or blind child. The homestead, however, is exempt only up to the applicable equity limit which in New York is $1,033,000, although this limit does not apply if the home is occupied by the applicant’s spouse, minor child, or blind or disabled child.

The exempt status of the home, however, can be lost such as when a Chronic Medicaid recipient enters a nursing home for more than six months and is determined to be in permanent absent status where the individual’s medical condition is such that it is not reasonably likely that he/she will return home. If the household is still being occupied by the applicant’s spouse, disabled or blind child then the home will remain exempt, but if no such individuals are occupying the home, then Medicaid will be denied on the basis of excess resources.

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While the home may be exempt for purposes of determining eligibility, upon the applicant’s death it is important to keep in mind that Medicaid has the right to place a lien on the property to recover the value of services provided if the applicant is not survived by a spouse, minor or disabled child, and the property is party of the applicant’s probate estate (meaning the property passes through the applicant’s Will or by intestacy if there is no Will). This is where an experienced elder law attorney can step in to help protect the home from estate recovery, such as by creating a trust for the property or by taking advantage of certain exempt transfers of property allowed under the Medicaid program.

Nancy Burner, Esq. is the founder and managing partner at Burner Prudenti Law, P.C. focusing their practice areas on Estate Planning, Elder Law and Trusts and Estates. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.