Medicaid Policy Shifts Ahead: What Attorneys Need to Know About Potential LTC Changes

As attorneys who serve the senior population, staying informed about regulatory changes is critical, especially when those changes may directly impact your clients’ access to long-term care coverage through Medicaid. The proposed 2025 Reconciliation Bill by the House Energy and Commerce Committee includes a variety of Medicaid provisions that could affect how you advise your crisis planning clients. Although the changes are expansive to the program as a whole, specific changes to long-term care Medicaid seem to be limited. These include nursing home staffing requirements, Medicaid’s home equity limit, and retroactive coverage.

See a full breakdown of the Medicaid provisions in the 2025 Reconciliation Bill.

Nursing Home Staffing Requirements

In 2024, the previous administration introduced a final rule mandating minimum staffing levels in long-term care facilities. The rule would have required:

• A registered nurse on-site 24/7
• At least 3.48 nurse staffing hours per resident per day
• Increased transparency from state Medicaid agencies on how much of institutional LTC Medicaid payments go toward worker compensation
• Additional funding for workforce development in nursing homes

While the rule was aimed at improving care quality, it raised concern across the industry about staffing shortages and cost burdens. However, the 2025 Reconciliation Bill would bar the Secretary of Health and Human Services from implementing or enforcing this rule.

What This Means for Your Clients: Even if the rule is no longer enforceable, many facilities may have already begun adjusting staffing models in anticipation. Attorneys should be aware that this transition period could still affect the availability or cost of care—factors worth considering in Medicaid planning discussions.

Read More: The Importance of Medicaid Planning and the Attorney’s Role

Medicaid Home Equity Limit

Medicaid eligibility rules for long-term care typically include a cap on the amount of home equity a person can retain while still qualifying for benefits. In 2025, federal rules require states to set this limit between $730,000 and $1,097,000, adjusted annually for inflation.

The proposed 2025 Reconciliation Bill, however, would alter this limit:

• Effective January 1, 2028, the states may elect a minimum equity limit that could be lowered to $500,000 and maximum home equity limit could not exceed $1,000,000, regardless of future inflation.
• States would also be permitted to establish different rules for homes located on a lot that is zoned for agricultural use.

What This Means for Your Clients: Freezing and giving states the ability to lower the home equity limit could have serious consequences for clients who own their home, particularly if their home is their primary asset. Attorneys should begin evaluating the implications for estate planning and Medicaid eligibility now, especially for clients expecting to rely on their home’s value in future long-term care planning.  Additional proactive Medicaid planning may be needed in order to ensure the client’s home value does not disqualify them from receiving benefits.

Retroactive Medicaid Coverage

Currently, states are required to offer Medicaid coverage for up to 90 days prior to the date of application, as long as the individual was eligible during that period. This retroactive coverage provision has been a critical safeguard for seniors and families facing unexpected medical events, such as sudden nursing home admission or emergency hospitalization.

Under the 2025 Reconciliation Bill, retroactive Medicaid coverage would be limited to just one month (30 days) prior to the date of application. This significantly shortens the window during which medical expenses can be covered retroactively, increasing the financial risk for individuals who delay applying for benefits. This change would go into effect October 1, 2026.

What This Means for Your Clients: This change underscores the importance of timely Medicaid applications and proactive long-term care planning. Attorneys should encourage clients to seek legal guidance as soon as a need for care arises to ensure a smooth transition. Even short delays in filing could result in substantial out-of-pocket costs, especially in crisis situations where immediate care is required.

Read More: The Impact of Inflation on Long-Term Care Costs and Estate Planning

These potential policy shifts underscore the importance of proactive Medicaid planning. Whether navigating current care options or preparing for future eligibility, your clients will rely on your legal guidance to protect their assets and secure access to care.

If you’d like help interpreting how these changes may affect specific cases or your broader planning strategies, contact us today. Our team is here to help you stay ahead of the curve.