She’s Been in the Nursing Home for Three Years and the House Is Still Exempt, Because on One Line of the Application She Wrote That She Intends to Come Home
A single checkbox on a Medicaid application can keep a nursing home resident's house off the table for years, and most families have no idea it exists until it is too late to use it.
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If a parent is on Medicaid in a nursing home, one line on the application does most of the work in protecting the house. It is the box where the applicant states intent to return home. Check it, and the primary residence is generally excluded from countable resources for Medicaid long-term care eligibility, even if the resident has been institutionalized for years.
Most families never read this rule, which is why a house can sit in a parent’s name through three years of nursing home care without disqualifying them.
One Line, One Legal Effect
Federal Medicaid rules treat the home as an excluded resource for an institutionalized single applicant so long as the applicant intends to return to it. The standard is the applicant’s subjective intent, not a doctor’s forecast about whether return is realistic. A resident with advanced dementia who will almost certainly never leave can still satisfy the standard if the application says they intend to return. Some states require reaffirming intent at renewal; the mechanism is the same.
Where the Rule Actually Lives
The home exclusion sits in the Medicaid statute, and its treatment for institutionalized applicants tracks the Social Security Administration’s home exclusion guidance in POMS SI 01130.100, which state Medicaid agencies incorporate through their own manuals. The equity cap that limits the exclusion comes from the Deficit Reduction Act of 2005, codified at 42 U.S.C. 1396p(f). The best course of action is to ask your state Medicaid agency for the manual section, as every state publishes one.
Who This Covers, and Who It Does Not
The intent to return mechanism matters most for an unmarried applicant. If a community spouse still lives in the home, the residence is protected on a different basis. If the applicant’s home equity exceeds the state’s cap, the exclusion fails regardless of intent, and that equity becomes countable, which can defeat eligibility outright. States set their own equity cap within a federal floor and ceiling that adjusts annually. California historically applied no cap; confirm current state practice before relying on any figure.
How the Declaration Actually Gets Made
- On the Medicaid long-term care application, locate the item asking whether the applicant intends to return home. Answer yes if that reflects the applicant’s intent. If the applicant cannot communicate, an authorized representative or agent under a durable power of attorney typically signs.
- Attach a short signed statement of intent to return if the form allows. Keep a copy.
- Verify the state’s home equity limit with the state Medicaid agency, and confirm the property’s current equity is below it.
- Calendar the redetermination date. If the state requires you to reaffirm your intent at renewal, missing it can make the home a countable resource.
- Keep the home insured, taxed, and maintained. A Medicaid resident’s income is generally applied to the cost of care after a small personal needs allowance. Rental income is generally countable and can raise the patient’s required contribution.
What Families Miss
The declaration preserves eligibility during life but does nothing about estate recovery after death. Federal law at 42 U.S.C. 1396p(b) requires states to seek recovery from the estates of Medicaid recipients who received long-term care services at age 55 or older, and the home is typically the principal asset recovered. A family that kept the house exempt through years of care can still lose it to a state claim once the resident dies.
Recovery has exemptions. States generally cannot recover while a surviving spouse is alive, while a child under 21 or a blind or disabled child of any age survives, and cannot force sale while a sibling with an equity interest who lived in the home for at least one year before institutionalization remains there, or while an adult caregiver child who lived in the home for at least two years and provided care that delayed institutionalization remains there. Some states limit recovery to the probate estate. A hardship waiver exists but is narrow and locally defined.
The declaration preserved eligibility, but keeping the house from estate recovery requires an elder law attorney licensed in the applicable state.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
