One of the most common questions families ask when a loved one needs to be placed in a Nursing Home are:

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“Will Medicaid take my house?”

The simple answer is: Not necessarily.

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Owning a home does not automatically prevent someone from qualifying for Medicaid in New York, and applying for Medicaid does not mean that New York simply takes ownership of your house.

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However, your home can become an important part of Medicaid planning—particularly when applying for nursing home Medicaid. Rules involving home ownership, transfers, liens and Medicaid estate recovery can affect what happens to the property.

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Understanding these rules before making changes to a deed, selling a home or transferring property can be extremely important.

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Can I Own a House and Still Qualify for Medicaid in NY?

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Yes.

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A primary residence can potentially be treated as an exempt resource for Medicaid eligibility purposes under certain circumstances.

For example, different rules may apply when:

• You continue to live in the home

• Your spouse lives in the home

• Certain other qualifying family members live in the home

• You are temporarily in a nursing facility and intend to return home

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The rules become more complicated when someone enters a nursing home permanently.

Owning a house does not automatically mean you cannot receive Medicaid.

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What Happens to My House If I Enter a Nursing Home?

This depends on your individual circumstances.

Medicaid considers factors including:

• Who owns the property

• The property's equity

• Whether you intend to return home

• Whether you have a spouse

• Who is currently living in the home

• Whether the property has been transferred

• When a transfer occurred

• Whether an exception to Medicaid's transfer rules applies

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This is why families should avoid assuming that they must immediately sell or transfer a parent's house when nursing home care becomes necessary.

Before changing ownership of a home, understand how that decision could affect Medicaid eligibility.

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Can I Give My House to My Children Before Applying for Medicaid?

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This is an area where families need to be particularly careful.

For nursing home Medicaid, transferring property for less than fair market value can potentially create a Medicaid transfer penalty.

However, certain transfers of a home may qualify for exceptions.

Depending on the circumstances, exceptions can include transfers to:

• A spouse

• A child under age 21

• A qualifying blind or disabled child

• A qualifying sibling with an equity interest who meets residency requirements

• A qualifying caregiver child who meets Medicaid's requirements

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Every situation is different.

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Do not transfer a house simply because someone told you that you have to “get it out of Mom's name.”

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A transfer that seems like a simple solution can create an eligibility problem if it isn't handled correctly

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What Is the Medicaid 5-Year Lookback?

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When someone applies for Medicaid coverage of nursing home care, financial transactions and asset transfers during the applicable lookback period may be reviewed.

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This can include transfers involving real estate.

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If property was gifted or transferred for less than fair market value and an exemption does not apply, the transaction may potentially result in a period during which Medicaid will not pay for nursing home care.

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That is why planning before transferring property can be so important.

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What Is Medicaid Estate Recovery?

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Medicaid eligibility and Medicaid estate recovery are two different issues.

Someone may qualify for Medicaid while owning an exempt home. That doesn't necessarily mean the home will never be relevant again.

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Under New York's Medicaid estate recovery rules, the state may seek recovery of certain Medicaid costs from a recipient's estate after death when applicable.

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There are important limitations and protections, including circumstances involving a surviving spouse, certain children and other qualifying relatives.

Hardship provisions may also apply in certain situations.

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This is one reason Medicaid planning should consider more than simply:

“Can I qualify today?”

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A comprehensive plan should also consider:

“What could happen to my assets later?”

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Can Medicaid Put a Lien on My House?

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A Medicaid lien and Medicaid estate recovery are often confused.

New York does not simply place a lien on every Medicaid recipient's house because the individual receives Medicaid.

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Specific rules determine when a lien may be imposed, including rules concerning permanently institutionalized individuals and post-death estate recovery.

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Family circumstances can also affect whether recovery is permitted or deferred.

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What If My Spouse Still Lives in Our House?

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There are important protections for married couples when one spouse requires institutional long-term care.

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The spouse remaining in the community may have protections involving the home, income and resources.

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Families should therefore not assume that the healthy spouse must sell the house or spend everything before the other spouse can qualify for Medicaid.

Spousal Medicaid planning should be reviewed individually.

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What If I Sell My House While Receiving Medicaid?

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Selling an exempt home can change the situation significantly.

A house and the cash received from selling that house are not necessarily treated the same way for Medicaid eligibility purposes.

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Once a property is sold, the proceeds should be reviewed to determine how they affect the Medicaid recipient's eligibility and resource position.

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If you or a family member currently receives Medicaid and you're considering selling a home, it is important to understand the Medicaid consequences before the closing whenever possible.

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Don't Make These Decisions Without Understanding the Medicaid Consequences

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Families sometimes make major financial decisions because they're afraid Medicaid will “take everything.”

That can lead to unnecessary or potentially problematic transactions.

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Before you:

• Transfer a deed

• Gift a house to a child

• Add someone's name to a deed

• Sell a Medicaid recipient's home

• Remove someone's name from a property

• Transfer large amounts of money

• Apply for nursing home Medicaid

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Have the situation reviewed first.

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There may be Medicaid rules, exemptions and planning options that you haven't considered.

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Free Medicaid Eligibility Screening

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Not sure how your home, savings or income could affect Medicaid eligibility?

Hudson Valley Medicaid Planning offers a FREE Medicaid Eligibility Screening for New York families.

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We can help you better understand:

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• Medicaid eligibility

• Nursing home Medicaid

• Community Medicaid and home care

• Income and resource requirements

• The Medicaid lookback

• Asset and property considerations

• Application requirements

• Documents you may need to provide

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Planning before making financial changes can make a significant difference.

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Hudson Valley Medicaid Planning

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Helping Hudson Valley families understand their Medicaid options with clarity and confidence.

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Serving families throughout Ulster, Dutchess, Orange, Greene, Sullivan and surrounding New York communities.

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Free Medicaid Eligibility Screening Available

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This information is provided for general educational purposes and is not legal advice. Medicaid rules are complex and subject to change. Individual circumstances should be reviewed before making legal or financial decisions.

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