Under the current Medicaid laws, even after you enter a nursing home, your personal residence will not be counted as part of your assets in determining if you are eligible for Medicaid coverage of your nursing home costs.
However, if you are single and if your equity interest in your home exceeds $500,000, then your house will be counted, almost certainly causing you to be disqualified from Medicaid coverage.
If you are married and your spouse continues to reside in the home, then it will be exempt no matter what its value. Also, if you have a dependent or disabled child living in the home, again there is no value limitation.
But what if you are single and you move from your home to an assisted living facility, and later your condition requires you to move into a nursing home? Will Medicaid pay for that nursing home? Will your former home continue to be exempt?
Unfortunately, no. Once you moved out of your home of many years, it was no longer your "principal residence," so it's now considered a house, not your home and lost its exemption. Now, some states will continue the exemption for up to six months, so long as you maintain that you continued to have the "intent to return" to your former home, but those states are in the minority.
Indeed, even if you moved directly from your home to a nursing home (and for these purposes a short transitional stay in a hospital does not count), your home may not be exempt unless you continue to have the "intent to return" to your former home. Under federal law, if you cannot express this intent yourself, your spouse or dependent relative may express it for you. That being said, it is always a better idea to write down your intent to return home as soon as possible after you enter a nursing home, so that should it become necessary to document your intent, there will be written proof.
In summary, there are specific triggers that cause a home to lose its protected status. An exempt home becomes a countable asset when the owner has no living spouse or dependent remaining in the community home and:
- Moves into a nursing home or other medical institution permanently with no expressed intent to return to the community home.
- Transfers the home for less than fair market value, or
So the moral of the story is, if you move from your home to an apartment, independent living or assisted living facility, you probably should consider selling your former principal residence and dealing with the proceeds in a manner that will best provide for your care long into the future. Part of your plan may be to prepare for the eventuality of moving into a nursing home. If so, it is important to contact an experienced elder law attorney as soon as possible, so that there will be ample time to put a good plan into place, make gifts if advisable, etc. The sooner you plan, the more of your assets you will be able to keep.