I frequently get asked the the question, "Can Medicaid take your house to pay the nursing home?"
As a general rule, a person's home is exempt and is not counted when he or she applies for Medicaid, so long as the equity value is under $552,000. If you are married and your spouse continues to live in the home, then the home is exempt regardless of its value. Also, several states with high property values have increased the single-person exemption to $828,000, so if you are single and your home is worth close to $552,000, you'll need to check your state's rules for Medicaid to see if this higher exemption amount applies to you. Finally, some states will require that the Medicaid applicant/homeowner indicate orally or in writing that they "intend to return" to their home should they ever become physically able to do so, regardless of how unlikely this may be. If the applicant is unable to understand or communicate this, then a family member can communicate this intention to the state Medicaid workers.
Note that although the house may be exempt at the time the owner applies for Medicaid, a few states will begin to count the house once six months have passed, if it is clear that the owner will never be able to return to the house based on a physician's examination and conclusion. However, this is the minority position, and in most states the house will continue to be exempt for the duration of the applicant's lifetime.
In all states, upon the death of the Medicaid recipient, the state will seek repayment of its Medicaid outlays that were made on behalf of the Medicaid recipient. So, for example, if Mom was in the nursing home for two years and the state was paying the nursing home $4,000/month for her care, then the state will file a claim against Mom's estate in the amount of $4,000 x 24 months = $96,000. If the house was still in Mom's name at her death, then in order to repay the state the $96,000, the house will have to be sold. Any amount of proceeds in excess of the $96,000 can then be distributed under Mom's will, e.g., typically to her children.
In summary, then, the general rule is that Mom's home will not be required to be sold to pay the nursing home--or the state government--while Mom is alive, but may be required to be sold to repay the state, upon Mom's death.