Bush Proposes to Eliminate States’ Right to Increase Medicaid Home Equity Limit

Last Updated: 11/12/2007

Included in the more than $100 billion in Medicare and Medicaid cuts called for in President Bush’s 2008 Budget Proposal is a provision that would bar Medicaid coverage to anyone with a home valued at more than $500,000 and do away with the states’ option to increase that limit.

The Deficit Reduction Act of 2005 (DRA) amended a federal law making individuals with home equity exceeding $500,000 ineligible for Medicaid (the limit does not apply to applicants who have a spouse or a minor or disabled child living in the home.) However, the DRA allowed states to increase that limit to $750,000 at their discretion, and several states, including New York and Maine, have so far chosen the upper limit. Bush’s 2008 Budget Proposal seeks to remove the states’ right to increase the home equity limit and proposes that the limit be fixed at $500,000 nationwide.

To see an overview of the President’s proposed Fiscal Year 2008 budget for the Department of Health and Human Services, click here.

For a summary of the DRA’s provisions, click here.