Can You Own a Home and Get Medicaid in New York?

You can own a home and still get Medicaid in New York. However, if you do not protect this home, after your death, Medicaid can seek reimbursement for the costs of care provided through estate recovery. This means that, in the absence of any asset protection strategy, Medicaid can claim against the your estate, including your interest in the home, unless there are surviving exempt relatives or co-owners under certain conditions.

Qualifying for Medicaid While Owning a Home

Medicaid does not count the house as an asset if the home equity is under $1,097,000 in 2025 in New York. This home equity limit allows individuals to qualify for Medicaid while keeping their home. The limit is subject to change annually based on inflation. For example, if an individual owns a home with an equity value of $800,000, it would not be counted as an asset for Medicaid eligibility purposes in 2025. However, if the home equity (value of home less outstanding debt against it) exceeds $1,097,000, the excess amount would be considered a countable asset and may need to be spent down or protected through other strategies to qualify for Medicaid.

If a spouse or dependent child lives in the house, Medicaid waives the home equity limit, and the house is protected regardless of its value. Dependent childen are children under 21, blind, or disabled. The house remains exempt as long as the spouse or dependent child continues to live there. For instance, if a Medicaid applicant owns a home with an equity value of $1,500,000 and their spouse continues to reside in the home, the entire value of the home would be exempt from Medicaid asset calculations. Similarly, if a disabled adult child lives in the home, the home equity limit would be waived, and the house would be protected regardless of its value, as long as the child continues to reside there.

Medicaid Estate Recovery Program

Medicaid can seek reimbursement from the estate of a deceased beneficiary for the costs of their care, potentially involving the home, though protections are in place for surviving spouses, dependent children, and siblings with an equity interest in the home. The Medicaid Estate Recovery Program (MERP) is a federal requirement that mandates states to recoup Medicaid expenditures from the estates of deceased Medicaid recipients who were 55 years or older when they received benefits and those who received institutional care, such as nursing home services, regardless of age.

The primary target for estate recovery is the Medicaid recipient's home. After the recipient's death, if there are no surviving individuals who meet the exemption criteria, such as a spouse, dependent child, or sibling with an equity interest living in the home, Medicaid can file a claim against the estate to recover the costs of care. The amount of the claim is limited to the total Medicaid payments made on behalf of the recipient for long-term care services, home and community-based services, and related hospital and prescription drug services.

For example, if a Medicaid recipient received $100,000 worth of nursing home care and passed away without any surviving exempt individuals, Medicaid could file a claim against the recipient's estate, including their home, to recover the $100,000. If the home is the only asset in the estate and it is sold for $200,000, Medicaid would be entitled to recover $100,000 from the sale proceeds, and the remaining $100,000 would be distributed to the recipient's heirs according to their will or state intestacy laws.

It is important to note that Medicaid estate recovery only applies to the Medicaid recipient's assets at the time of their death. If the recipient transferred their home or other assets to family members or a trust prior to their death, those assets would not be subject to estate recovery, provided the transfers were made outside of the five-year lookback period and did not violate any Medicaid rules.

Medicaid estate recovery can have significant implications for families, especially those who wish to keep the home in the family or pass it down to future generations. Consulting with an elder law attorney like us can help families understand their options for protecting the home and other assets from Medicaid estate recovery while ensuring eligibility for necessary long-term care services.

Asset Protection Strategies For Your Home

Consulting with us before entering a nursing home is crucial for Medicaid planning and asset protection. We have the experience in navigating the complex Medicaid rules and regulations and can advise on strategies to protect the home and other assets. Early consultation is essential to maximize asset protection opportunities. We can also assist with the Medicaid application process.

For example, if an individual anticipates needing nursing home care in the near future, they should consult with an elder law attorney as soon as possible. The attorney can review the individual's financial situation, including their home ownership, and recommend strategies to protect their assets. This may involve transferring the home to a spouse or dependent relative, establishing an irrevocable trust, or using other legal tools to shield the home from Medicaid spend-down and estate recovery.

Irrevocable Trusts

Transferring a home to children, another person, or an irrevocable trust typically results in a penalty period for Medicaid eligibility. Medicaid considers the transfer of a home to be a gift, and gifts made within the five-year lookback period trigger a penalty. The penalty is a period of ineligibility for Medicaid coverage, and it applies even if the transfer was made with good intentions. Transferring the home to an irrevocable trust also incurs a penalty.

For instance, if an individual transfers their home worth $400,000 to their adult children three years before applying for Medicaid, the transfer would be considered a gift and would trigger a penalty period. The average monthly cost of nursing home care in New York City as of 2025 is $14,582 per month so the penalty period would be 27.4 months ($400,000 / $14,582). During this time, the individual would be ineligible for Medicaid coverage and would need to pay for their long-term care out of pocket.

However, there are legal circumstances under which a house can be transferred without incurring a penalty. These include transferring the home to a spouse, a child under 21, a blind or permanently disabled child, a trust for a disabled individual under 65, a sibling with an equity interest who has lived in the home for at least one year, or an adult child who served as the primary caregiver for at least two years. Each of these exceptions has specific requirements that must be met to avoid a penalty.

For example, if a parent transfers their home to a trust established for their disabled child under age 65, the transfer would not incur a penalty as long as the trust is an irrevocable "Medicaid Qualifying Trust" or "pooled trust" managed by a non-profit organization for the sole benefit of the disabled child. Similarly, if an adult child has lived with their parent for two years and provided care that allowed the parent to delay entering a nursing home, the parent can transfer the home to the caregiver child without incurring a penalty.

Medicaid Liens for Estate Recovery

Medicaid may put a lien on the house for the amount spent on care after an individual's death. The state can place a lien on the deceased recipient's home to secure the debt, allowing them to collect the amount spent on the recipient's care from the proceeds of the home sale. The lien does not force the immediate sale of the home, but it must be satisfied before the property can be transferred or sold. The amount of the lien is limited to the total Medicaid expenditures for the recipient's care.

However, there are exceptions where the state cannot file a lien. As previously mentioned, if a surviving spouse continues to live in the home, the state cannot place a lien on the property. The state is also prohibited from filing a lien if a disabled or blind child of any age, a child under the age of 21, or a sibling with an equity interest who has been residing in the home for at least one year before the recipient's death lives in the house. These exceptions protect the rights of certain family members to remain in the home without the threat of a Medicaid lien.

In some cases, the state may grant an undue hardship waiver to prevent the filing of a lien. The waiver is typically granted when the estate's beneficiaries would face significant financial hardship if the lien were enforced. Factors considered for an undue hardship waiver include the beneficiaries' income, assets, and ability to obtain alternative housing. The state has discretion in granting undue hardship waivers and may require detailed documentation of the beneficiaries' financial circumstances. Consulting with an elder law attorney can help families navigate the undue hardship waiver process and protect their interests.

If a lien cannot be filed due to the presence of a protected individual, the state's ability to recover Medicaid expenditures is delayed. Once the spouse, disabled/blind child, minor child, or sibling with equity interest no longer resides in the home, the state can proceed with estate recovery. If the protected individual dies or permanently moves out of the home, the state can file a lien and seek to collect the Medicaid debt. It is crucial for families to understand the potential long-term implications of Medicaid estate recovery and to plan accordingly with the help of an elder law attorney like us.

Working with us is essential when exploring options for Medicaid planning and asset protection. Medicaid rules and regulations are complex and subject to change, and we can help families navigate the Medicaid application process, ensure eligibility, identify potential issues, and recommend solutions tailored to each family's unique circumstances. Professional guidance can help families make informed decisions and avoid costly mistakes.

Owning a home does not automatically disqualify an individual from receiving Medicaid in New York. There are strategies available to protect the home and other assets from Medicaid spend-down and estate recovery. Transferring the home to children or others may result in a penalty period, but there are exceptions for certain family members. Medicaid may place a lien on the home for the amount spent on care, but there are circumstances where a lien cannot be filed. Working with us is crucial to navigate the complex Medicaid rules and develop a personalized plan. Medicaid planning should begin well before the need for long-term care arises. Early planning allows for more options and flexibility in protecting assets.

Should you need assistance in Medicaid planning, you can call the Law Offices of Albert Goodwin at 212-233-1233 or send us an email at [email protected].

We represent Medicaid clients throughout the state of New York, including all five boroughs of New York City (Manhattan, Brooklyn, Queens, The Bronx, and Staten Island), Long Island, and Upstate New York.