You may have heard that if your parent owns a home but requires nursing home care, Medicaid will consider the home an asset. The more assets your parent has, the less likely Medicaid will help cover the cost of long-term care.
The good news is that this is not true for many people. In most states, Medicaid is unlikely to consider a home an asset if the elderly person’s individual equity interest in it is less than $572,000. In some states with higher property values, this value may be higher, at $858,000. Per AgingCare, a home may qualify for other Medicaid exemptions as well.
Community spouse exemption
Medicaid has different rules for married and single individuals. If your elderly parent is married and is the only half of the couple that requires Medicaid assistance for nursing home costs, Medicaid is unlikely to consider the home an asset. This is definitely the case if your other parent, or your parent’s spouse, continues to reside in the primary residence. In this situation, Medicaid will consider the spouse a “community spouse,” and will exempt the home regardless of its value.
Child caregiver exemption
Medicaid also has a child caregiver exemption. If you or a sibling moved into your parent’s home and cared for him or her for at least two years prior to his or her submitting an application for Medicaid, then he or she may transfer the child to you for a nominal value. Medicaid will not penalize your parent for going through with the transaction.
Dependent or disabled child exemption
Finally, Medicaid makes an exemption for Medicaid applicants who have a dependent or disabled child living in the primary place of residence. In these situations, Medicaid will not consider the home an asset, regardless of the home’s value.