How Much House is Too Much?

Many of the articles on this website discuss obtaining Medicaid benefits to pay for long term care in a nursing home.  Medicaid benefits also may be available to pay the costs at other care environments, such as assisted living.  Some of these articles address the financial eligibility rules for Medicaid, discussing what one can and cannot keep and still qualify for Medicaid benefits.

One significant asset is one’s home property.  One is allowed to keep his or her home and still qualify for Medicaid as long as that person resided in the home property prior to entering the long term care facility and states (on the Medicaid application) an intent to return home (even if such intent is highly unlikely ever to be fulfilled).

Given the high value of even a modest home in some parts of Maryland, it is important to be aware that Medicaid imposes equity value limitations on an exempt home property.  Currently, one is allowed to keep as an exempt home property a residence with an equity value of $543,000 or less (which amount is adjusted annually to take into account inflation).  Market value is reduced by any liens or encumbrances (such as a mortgage) on the property to determine equity value.

Moreover, the equity value limits do not apply where the Medicaid applicant’s spouse, disabled child, or child under 21 resides in the home property, and the  equity limit also will not apply to a home property titled solely in the spouse’s name.

Given the very high value of homes in some parts of Maryland, it is important to keep in mind this equity value limitation on home property in the event you or a loved one should require Medicaid benefits for long term care.