Medicaid covers long-term care costs for low-income seniors. Strategic planning can protect home equity while establishing Medicaid eligibility for care funding.
Medicaid's Home Equity Exemption
California Medicaid (Medi-Cal) exempts primary residence from resource limits. You can own your home and its equity regardless of size while qualifying for Medicaid long-term care. If you move from the home or own investment property, those assets count toward resource limits that disqualify you from Medicaid benefits. The home exemption is powerful—it allows low-income seniors to protect substantial home equity while accessing long-term care coverage.
Spend-Down Strategies and Asset Protection
Seniors with excess assets (beyond resource limits) spend down through personal care expenses, home improvements, or other allowed uses before Medicaid eligibility. Transferring assets to children creates penalties unless the transfer occurred more than five years before Medicaid application (look-back period). Medicaid penalizes recent transfers, making advanced planning essential. Elder law attorneys structure spend-down and asset protection plans minimizing penalties.
Home-Equity Lines and Care Planning
Some seniors access home equity through lines of credit or reverse mortgages to fund early care needs before Medicaid becomes necessary. This preserves the home while funding immediate care. As resources deplete, Medicaid becomes available. Reverse mortgages allow seniors to access home value without selling, though costs and complexity require careful consideration.