Can a nursing home take your house? Medicaid, liens and estate recovery
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Key takeaways
- Under federal Medicaid law, liens and estate recovery are carried out by the state Medicaid agency, not by the nursing home. A nursing home's own collection of unpaid bills is a matter of state law.
- For 2026, a person whose home equity is above the state's limit, between $752,000 and $1,130,000 depending on the state, does not qualify for Medicaid nursing home care unless a spouse, or a child under 21 or a blind or disabled child, lawfully lives in the home (a hardship waiver may also apply).
- States must seek repayment from the estate of a Medicaid recipient for nursing home care received at age 55 or older, but only after a surviving spouse has died and only when there is no surviving child under 21 and no blind or disabled child.
- A home can be transferred without a Medicaid penalty to a spouse, a child under 21, a blind or disabled child, and in limited cases a sibling or a caregiver child.
Under federal Medicaid law, the rules that can reach a house are applied by the state Medicaid agency, not by the nursing home: the home equity limit when someone applies, a lien in limited cases while the person is alive, and estate recovery after death. Federal Medicaid law does not address a nursing home's own collection of unpaid bills; that is governed by state law. A certified nursing home may not request or require a third party, such as a family member, to guarantee payment as a condition of admission or continued stay. A spouse, a child under 21 and a blind or disabled child have special protections at each of these steps.
Which rule applies to you?
| Situation | The federal rule |
|---|---|
| Applying for Medicaid nursing home coverage | Home equity above the state's limit makes the person ineligible, unless a spouse, a child under 21 or a blind or disabled child lawfully lives in the home (a hardship waiver may also apply). |
| Living in a nursing home on Medicaid | The state may place a lien only in limited cases. It may not place the lien for a permanently institutionalized resident while a spouse, a child under 21, a blind or disabled child, or a sibling with an equity interest who meets the residence rule lawfully lives there. |
| After death | The state must seek repayment from the estate for nursing home care received at age 55 or older, but only after a surviving spouse has died and only if there is no surviving child under 21 and no blind or disabled child. |
| Giving the home away | A transfer for less than its value within the 60-month look-back can lead to a penalty period, except transfers to certain family members. |
What is the home equity limit?
A person whose equity in their home is above the limit does not qualify for Medicaid nursing home or other long-term care services (42 U.S.C. § 1396p(f)). For 2026, CMS lists a minimum limit of $752,000 and a maximum of $1,130,000. Each state uses a figure in that range, so check with your state Medicaid agency.
- The limit does not apply if the person's spouse, or their child who is under 21 or is blind or disabled, lawfully lives in the home.
- Lowering equity. The law says a person may use a reverse mortgage or a home equity loan to reduce their equity.
- Hardship. Federal law requires HHS to set up a process for waiving the limit when hardship is shown.
- Change from 2028. A 2025 federal law (Public Law 119-21, § 71108) changes the limit from January 1, 2028. A state that sets a limit above the minimum may not go above $1,000,000, except for a home on a lot zoned for agricultural use. The 2026 limits are not affected.
For the other financial limits, see how Medicaid pays for a nursing home.
Can the state put a lien on the house?
Only in limited cases. Before death, a state may place a lien on a Medicaid recipient's real property only under a court judgment for benefits paid incorrectly, or when the person lives in a nursing home or other medical institution, must pay nearly all their income toward their care, and the state decides, after notice and a chance for a hearing, that they cannot reasonably be expected to be discharged and return home (42 U.S.C. § 1396p(a)).
The state may not place that lien on the home while any of these people lawfully lives there:
- the person's spouse;
- their child who is under 21, or blind or disabled;
- their brother or sister who has an equity interest in the home and lived there for at least one year right before the person entered the institution.
The lien ends if the person is discharged and returns home.
What happens to the house after death?
Federal law requires states to seek repayment from the estate of a Medicaid recipient who was 55 or older when they received benefits, for nursing home care, home and community-based services, and related hospital and prescription drug services (42 U.S.C. § 1396p(b)). States may choose to recover for other Medicaid services too.
- When it waits. Recovery can happen only after the death of the surviving spouse, and only when there is no surviving child under 21 and no blind or disabled child.
- A home under a lien. For a person whose home had a lien because they were permanently in a nursing home, the state must also seek repayment from the estate or when the home is sold, whatever the person's age. That recovery must wait while a sibling who lived in the home for at least a year before the admission, or a son or daughter who lived there for at least two years before the admission and shows the state that they gave care that let the parent stay at home, lawfully lives there and has lived there continuously since the admission.
- What counts as the estate. It always includes the probate estate under state law. A state may also include property that passes outside probate, such as through joint tenancy, a life estate or a living trust. So whether a particular home can be reached depends on the state.
- Hardship. Every state must have a way to waive recovery when it would cause undue hardship.
Estate recovery is done by the state Medicaid agency, not by the nursing home. See Medicaid.gov on estate recovery.
Can you give the house to family?
Giving away assets or selling them for less than their value on or after the look-back date, 60 months before the first date the person is both in a nursing home (or getting nursing-home level care in a medical institution) and has applied for Medicaid, can lead to a period when Medicaid will not pay for nursing home care and certain other long-term care. Federal law makes an exception for transferring title to the home to:
- the spouse;
- a child who is under 21, or blind or disabled;
- a brother or sister who has an equity interest in the home and lived there for at least one year right before the person entered the institution;
- a son or daughter who lived in the home for at least two years right before the person entered the institution and, as the state determines, gave care that let the parent stay at home.
See Medicaid's 5-year look-back for how the penalty is counted.
Where to get help
These rules are applied by your state Medicaid agency, and states choose their own home equity limit within the federal range, how broadly they define the estate, and their estate recovery hardship procedures within federal standards. Your state Medicaid agency can tell you which rules it uses, and an elder law attorney can explain your options. The long-term care ombudsman can help with problems in a nursing home. See also signing as the responsible party.