Families planning for long-term care face a stark divide depending on where they live. Federal law allows states to set their own home-equity ceilings for nursing-home Medicaid eligibility, and the gap between the lowest and highest thresholds now spans hundreds of thousands of dollars. A homeowner in Texas or North Dakota can retain up to $752,000 in home equity and still qualify, while applicants in Washington state can hold $1,130,000 and those in Massachusetts can exceed $1.1 million under published guidelines.
How the $752,000 floor and $1.1 million ceiling split the country
The federal statute that governs this split is found in Medicaid’s transfer-of-assets rules, which authorize states to apply a home-equity test when determining eligibility for long-term services and supports, including nursing-facility care. Congress sets a national minimum and maximum range each year, and each state chooses a point within that band. The result is a patchwork system where geography, not just medical need, can determine whether someone qualifies for help with nursing-home bills.
At the low end, according to Texas Medicaid guidance, the state’s substantial home equity limit stands at $752,000 for 2026 and beyond, meaning applicants with equity above that level are ineligible for certain long-term services unless an exception applies. North Dakota adopted the same $752,000 figure for applicants on or after January 1, 2026, under the state’s eligibility manual, aligning its policy with the federal floor.
At the high end, Washington state set its home equity limit at $1,130,000 effective January 2026, according to the Apple Health resource standards. Massachusetts goes further, publishing maximum home equity limits above $1.1 million in its MassHealth financial guidelines, allowing homeowners with substantial equity to qualify for coverage that would be out of reach in lower-threshold states.
The practical impact is stark. A homeowner with $900,000 in equity would be disqualified from nursing-home Medicaid in Texas or North Dakota but could still receive Medicaid-funded care in Massachusetts or Washington, assuming other eligibility rules are met. For married couples, the stakes compound because separate spousal-impoverishment protections govern how much the spouse remaining at home can keep in countable resources. Those protections, including community spouse resource allowances and income rules, were updated for 2026 under federal standards described on Medicaid’s spousal rules, and they interact with home-equity caps to shape how much a family must spend down before qualifying.
State choices and the estate-recovery question
The divergence between states also raises a question about what happens after a Medicaid recipient dies. Federal law requires every state to seek recovery from the estates of certain deceased beneficiaries to recoup the cost of long-term services and supports, including nursing-home care. In practice, that can mean placing a claim against the home that was excluded as an asset during the person’s lifetime.
Because high-threshold states allow applicants to qualify while holding more home equity, they may end up pursuing larger estate-recovery claims against higher-value properties. Advocates in those states sometimes argue that generous eligibility paired with aggressive recovery effectively turns the home into a delayed source of payment for care, rather than a shielded family asset. In lower-threshold states, by contrast, some homeowners are screened out of Medicaid altogether and must rely on private funds, long-term-care insurance, or family support, reducing the scope of later estate claims but increasing the risk that people go without needed care or deplete their savings during life.
Estate recovery rules are not identical from state to state. While federal statute sets minimum requirements, states have discretion over how broadly to define the estate, whether to pursue claims against non-probate assets, and when to waive or delay recovery in cases of hardship. That flexibility means two families with similar homes and care histories can face very different outcomes depending on where they live when the Medicaid recipient dies.
Planning professionals say the interaction between home-equity limits and estate recovery is often misunderstood. Some families assume that keeping equity below the state cap permanently shields the home, only to discover that recovery rules still apply after death. Others, particularly in high-cost housing markets, worry that exceeding the cap will automatically disqualify them, even though options like spending down on medically necessary home modifications or exploring spousal protections may change the picture.
What families can do now
For older homeowners and their adult children, the widening spread between the $752,000 floor and the $1.1 million-plus ceiling underscores the need for state-specific advice. Eligibility hinges not only on the value of the primary residence but also on how state Medicaid offices interpret federal guidance, apply spousal-impoverishment rules, and enforce estate-recovery policies.
Experts generally recommend that families start conversations about long-term care well before a crisis. That can include reviewing state Medicaid manuals, consulting elder-law attorneys familiar with local practices, and considering tools such as long-term-care insurance or savings earmarked for support at home. While no strategy can fully erase the geographic disparities built into current law, understanding how home equity is treated in a particular state can help families make more informed decisions about aging in place, relocating, or planning for a possible move to a nursing facility.
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