Can I Stay on Medicaid if I Sell My Home?

For many Florida seniors, Medicaid is a crucial resource for covering healthcare costs, in particular the costs of long-term care. If you’re considering selling your home, you might be wondering how this action will impact your Medicaid eligibility. The answer depends on several factors, including how the sale proceeds are handled and whether the home was considered an exempt asset before the sale.

Below, we discuss the potential effects of selling your home while on Medicaid and strategies to preserve your benefits. For personalized advice and professional assistance tailored to your specific needs and circumstances, contact Shalloway & Shalloway to visit with an experienced and dedicated West Palm Beach Medicaid planning attorney.

How Medicaid Treats Your Home

Medicaid has strict income and asset limits, but in Florida, a primary residence is generally considered an exempt asset as long as its equity value does not exceed a certain limit ($730,000 for a single applicant in 2025). This means that owning a home does not necessarily affect Medicaid eligibility, provided the home is your principal residence and you intend to return to it if you are in a nursing home.

Additionally, a home may remain exempt if it is occupied by a spouse, a dependent child, or a disabled or blind adult child. This exemption can be crucial for Medicaid recipients who wish to preserve their home for their family members while still receiving necessary healthcare benefits.

What Happens When You Sell Your Home?

When you sell your home, the proceeds from the sale become countable assets. Since Medicaid eligibility is determined by financial need, having too much cash from the sale could put you over Medicaid’s asset limit, which is typically $2,000 for an individual. If your assets exceed this limit, you could lose Medicaid coverage until you spend down the excess funds to qualify again.

The timing of the sale and the receipt of funds also matter. If the proceeds remain in your bank account at the time of your Medicaid recertification, they will likely be considered countable assets. This could lead to a temporary or permanent loss of benefits, depending on how the funds are handled.

How to Sell Your Home Without Losing Medicaid

If you are considering selling your home while on Medicaid, there are legal strategies that can help protect your benefits, such as the following:

1. Reinvesting in Another Exempt Asset – Using the proceeds from the sale to purchase another primary residence may allow you to maintain Medicaid eligibility. This strategy is often beneficial for those who are downsizing or relocating.

2. Spending Down the Proceeds – You may be able to spend the proceeds on exempt expenses, such as home modifications, medical equipment, prepaid funeral plans, or paying off debts, rather than simply retaining the cash. Other exempt expenses may include personal care services, legal fees, or even purchasing an annuity that complies with Medicaid regulations.

3. Establishing a Medicaid-Compliant Trust – Placing the proceeds into a properly structured irrevocable trust may help shield the assets from Medicaid’s countable resources while allowing you to maintain eligibility. However, it is important to ensure that the trust is structured correctly to avoid disqualifying yourself from benefits.

4. Gifting Strategies and the Look-Back Period – Medicaid imposes a five-year look-back period, meaning that any gifts or transfers for less than fair market value within five years of applying for Medicaid can result in a penalty period. Before gifting proceeds from a home sale, consult an elder law attorney to ensure compliance with Medicaid rules.

5. Purchasing a Medicaid-Compliant Annuity – In some cases, converting excess assets into a Medicaid-compliant annuity can allow you to maintain benefits while receiving structured payments over time. This strategy must be carefully implemented to meet Medicaid requirements.

What If You Are Selling the Home of a Medicaid Recipient?

If you are handling the affairs of a loved one who is in a nursing home and on Medicaid, selling their home may have additional implications. In some cases, Medicaid may attempt to recover funds through the estate recovery process after the recipient passes away. If the home was sold before their death, the proceeds could be subject to Medicaid recovery unless they were properly protected through legal planning.

Plan Strategically With a Florida Elder Law Attorney

Selling a home while on Medicaid can be a complex process with serious financial consequences if not handled properly. Before making any decisions, it’s essential to consult with an experienced elder law attorney who can guide you through the best strategies for protecting your Medicaid eligibility.

At Shalloway & Shalloway, P.A., we help seniors and their families navigate the critical yet complicated world of Medicaid planning, asset protection, and estate planning. Our team understands the nuances of Medicaid eligibility rules and can help you create a strategy tailored to your specific circumstances. Contact us today to schedule a consultation and learn how we can help you make informed decisions about your home and Medicaid benefits.