A Medicaid applicant seeking long-term care coverage can be denied over home equity that ranges from $752,000 at the federal minimum to $1,130,000 at the federal maximum, depending on which limit a state has chosen for 2026. The Centers for Medicare & Medicaid Services set both figures in a December 9, 2025 informational bulletin, raising them from 2025’s $730,000 and $1,097,000 under a formula tied to the Consumer Price Index. The nearly $400,000 spread between the low and high end means an applicant’s home value alone can decide eligibility differently depending on which side of a state line they live on.
A Federal Floor and Ceiling, Not One National Number
Section 1917(f) of the Social Security Act does not set a single home equity limit for Medicaid long-term care; instead, it establishes a floor and a ceiling and leaves each state to pick a figure in between, or at either end. CMS’s December 2025 informational bulletin confirms the 2026 minimum at $752,000 and the maximum at $1,130,000, both adjusted annually based on the Consumer Price Index for All Urban Consumers.
Older adults and people with disabilities make up about one in five Medicaid enrollees nationwide but account for more than half of total program spending, according to a 2026 KFF survey of state Medicaid eligibility rules — the same population for whom the home equity test decides access to nursing-home and home-based long-term care coverage.
The limit applies only to equity — the home’s value minus any outstanding mortgage or other debt secured against it — and only while calculating eligibility for long-term services and supports such as nursing facility care or home and community-based waiver services. A primary residence remains exempt entirely while a spouse or certain dependent relatives continue to live in it, regardless of its value.
Because the standard is federal, an applicant cannot simply move to a neighboring state after applying to take advantage of a higher limit; Medicaid eligibility is generally determined by the state where the applicant resides and intends to remain, so the relevant figure is fixed by residence, not by shopping for the most favorable number.
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Why the Numbers Rose for 2026
The 2025 home equity limits stood at $730,000 for the federal minimum and $1,097,000 for the maximum. Both figures rise each January under the same CPI-U adjustment that increases the community spouse resource allowance and the monthly maintenance needs allowance, so a year with higher inflation produces a larger jump. The move to $752,000 and $1,130,000 for 2026 reflects that formula rather than a policy change by Congress or CMS.
That distinction matters because a stale reference to the $730,000 figure has continued to circulate even after the 2026 numbers took effect on January 1. An applicant, family member, or elder-law attorney relying on last year’s ceiling could wrongly conclude that a borderline case is ineligible when the correct 2026 minimum would actually allow it, or the reverse in a state that uses the maximum.
Which States Use the Floor, the Ceiling, or Neither
The federal government does not require every state to make the same choice. Most states adopt the lower $752,000 figure, while a smaller group — including several in the Northeast alongside Colorado, Hawaii and the District of Columbia — apply the full $1,130,000 maximum, according to state-by-state tracking of the 2026 limits. A handful of states operate outside both numbers entirely: California has no home equity limit at all, and Idaho and Wisconsin have historically set their own figure between the two federal bounds rather than adopting either one outright.
The same December 2025 bulletin that set the home equity limits also confirmed the 2026 community spouse resource allowance, which lets a non-applicant spouse keep between $32,532 and $162,660 in countable assets while the applicant spouse qualifies for Medicaid. The two standards work together: the home equity test is applied before a couple’s other assets are divided, so a high-equity home can disqualify an applicant even when the couple’s countable savings fall well under the resource allowance.
Even when an applicant’s home equity clears the limit and Medicaid begins covering long-term care, that approval does not extinguish the home as an asset for good. Federal law requires state Medicaid programs to seek repayment from an enrollee’s estate after death for the cost of long-term care Medicaid paid, which is why elder-law attorneys frequently pair equity-limit planning with separate estate-recovery strategies rather than treating the equity threshold as the only number that matters.
Because the limit is recalculated every January and each state re-elects its figure independently, a Medicaid applicant’s home equity can mean something different in 2026 than it did in 2025, and something different again in 2027, without the applicant’s house changing in value at all. The number that matters is not the applicant’s net worth in the abstract, but a single figure — home equity — compared against whichever end of a widening federal range their state has chosen.
For a married applicant, the equity limit is only the first hurdle; the value can often be reduced through a documented mortgage, a home equity loan, or careful timing of a sale, strategies that elder-law attorneys use routinely, but only once a family knows the current-year figure that actually governs their state. With home values still climbing in many markets, the gap between a $752,000 floor and a $1,130,000 ceiling is likely to keep widening each year the CPI adjustment continues to apply.
This article was drafted with AI assistance and edited for accuracy.
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