If you’re on Medicaid and you’ve decided you need to sell your home, you’re likely facing two big questions. Will I lose Medicaid if I sell my house? How will Medicaid know if I sell my house? This guide breaks down how selling your home could affect your Medicaid eligibility and offers strategies for making plans and maintaining benefits. The short blended answer is: not necessarily, but yes, it is possible. Medicaid evaluates your eligibility based on income and assets, and selling a home could indeed affect these figures. However, if the proceeds from the sale are used in a manner that Medicaid exempts, such as buying another primary residence, you may not lose your coverage. The key is understanding how the sale affects your financial situation relative to Medicaid’s eligibility thresholds. The qualifying financial factors are means-tested through income and/or asset limits. The asset threshold is $2,000 in most states, which means selling your home will likely bring you well over Medicaid’s limit. The most common exception that allows you to retain Medicaid eligibility after a home sale is to use the proceeds to purchase your new primary home. Generally speaking, a Medicaid recipient’s principal residence is a non-countable (exempt) asset. (More on this below.) You can check your state eligibility requirements through Medicaid’s interactive map. When you applied for Medicaid, you were required to disclose all assets, including real estate. Medicaid has systems in place to monitor any changes in your assets. This includes coordinating with other federal and state agencies to track asset changes in order to approve your Medicaid redetermination or renewal. Here’s how they’ll find out: As you make plans to sell or transfer ownership of your home, keep in mind that Medicaid’s objective is to assist those with a genuine need. Honesty and transparency are the best policies to maintain your eligibility. Yes, Medicaid will know if you sell your house, but it’s also your responsibility to report your home sale to Medicaid. Understanding these mechanisms can help you plan your property sale while considering Medicaid’s guidelines, even if it means losing benefits for a short time until you are able to requalify. Enrollment is open year-round, so you can reapply if your circumstances temporarily change. Let’s look at some of your options. While your primary home is generally exempt from Medicaid’s asset limit, the capital gains or proceeds from the sale, in most cases, will not be exempt. This money can count toward Medicaid’s asset limit and disqualify you from coverage. However, there are some options to sell your house and keep Medicaid. These require careful planning to ensure you remain eligible for benefits. Here are strategies to consider: You can use the proceeds from your sale to purchase another primary residence. Medicaid generally does not count your primary home as an asset in determining eligibility. However, to keep your coverage, you must reinvest the proceeds into another primary residence in a timely manner. The time window can vary by state, but it is typically around three months. Check with your Medicaid agency about timeline requirements. If the sale of your home results in excess assets, which it probably will, you can spend down these funds on non-countable or exempt items and services. Eligible categories can differ depending on the application of policy and spend-down time limits in your state. These might include paying off credit card debt, medical bills not covered by insurance, making repairs or improvements on an exempt home, prepaying funeral expenses, or even buying or fixing a car that’s considered vital functional transportation. Spend-down rules are complicated, so you will want to consult with a Medicaid specialist if this is the path you choose. Consider consulting with a Medicaid planning professional or attorney. They can help you navigate the rules and ensure that your sale proceeds do not jeopardize your eligibility. This might include setting up a trust or other planning strategies compliant with Medicaid regulations. There is even value in planning ahead five years, which would be beyond the Medicaid look-back period.Will I lose Medicaid if I sell my house?
How will Medicaid know if I sell my house?
How can I sell my house and keep Medicaid?
1. Buy another primary home
2. Spend down excess assets
3. Plan ahead before the sale
