Can Medicaid Take Your House in Nebraska?

The Short Answer: Not While Your Parent Is Alive

Nebraska DHHS does not place TEFRA liens on a Medicaid recipient's home during their lifetime. Your parent's house cannot be seized, forced into sale, or encumbered with a state lien while they're alive and receiving Medicaid benefits. That's a common fear, and it's unfounded.

The real risk comes after death. Nebraska operates one of the most aggressive estate recovery programs in the country, and the family home is squarely in its crosshairs — unless you've planned around it.

The Home Exemption During Your Parent's Lifetime

While your parent is alive, their primary residence is exempt from Medicaid's $4,000 countable asset limit if any of these conditions are met:

• A spouse continues to live in the home
• A child under age 21 lives in the home
• A blind or disabled child of any age lives in the home
• The applicant has documented "intent to return" and home equity doesn't exceed $752,000

That "intent to return" provision is broader than it sounds. Even if your parent is in a nursing home with advanced dementia and will realistically never go home, documenting intent to return preserves the exemption. This is a standard planning step — the DHHS caseworker needs a written statement, and providing one keeps the home out of the asset count.

The home equity limit of $752,000 is the 2026 federal minimum that Nebraska follows. It measures your parent's equity interest in the property — the home's market value minus any outstanding mortgage. Most Nebraska homes fall well below this threshold.

What Happens After Death: Expanded Estate Recovery

This is where Nebraska gets aggressive. Under Neb. Rev. Stat. § 68-919, the state operates an "expanded estate" recovery program. After a Medicaid recipient dies, DHHS can recover the costs it paid for long-term care from both probate assets and non-probate transfers.

That second category — non-probate transfers — is what makes Nebraska's program broader than most states. DHHS can pursue recovery against:

• Jointly held bank accounts that pass to a surviving co-owner
• Transfer-on-death (TOD) deeds on real property
• Payable-on-death (POD) accounts
• Living trust assets
• Retained life estates (where your parent deeded the home but kept the right to live in it)

The common estate-planning tricks that work in other states — putting the house in a TOD deed, transferring it into a living trust, adding a child to the title as joint tenant — don't avoid recovery in Nebraska. DHHS acts as a general creditor and files claims against all of these asset types.

Who's Protected From Recovery

DHHS holds estate recovery in abeyance if any of these survivors exist at the time of the Medicaid recipient's death:

• A surviving spouse
• A child under age 21
• A blind or disabled child of any age

As long as a surviving spouse is alive, DHHS holds recovery in abeyance regardless of how the home is titled. The claim may become recoverable after the spouse dies if no protected survivor remains.

The Caregiver Exemption

Nebraska law provides a specific carve-out for the family home if an adult child provided live-in care that delayed nursing home placement. To qualify:

1. The adult child must have lived in the home with the parent for at least two years immediately before the parent's nursing home admission and continuously since institutionalization
2. The care provided must have demonstrably delayed the need for institutional placement
3. A physician's written attestation verifying the care timeline and its effect on delaying placement is sufficient documentation; the statute does not make that attestation the only way to establish the facts

If these facts are established, § 68-919 protects against foreclosure of a recovery lien on the home when it passes to that child; it does not necessarily erase the underlying debt. The protection is valuable, and contemporaneous documentation is easier to verify than a reconstruction after the parent dies.

The Sibling Exemption

A sibling who has an equity interest in the home, lived there for at least one year immediately before the Medicaid recipient was institutionalized, and has lived there continuously since may also receive protection against foreclosure of a recovery lien on the home.

Practical Steps to Protect the Home

Document intent to return. File this with the Medicaid application and keep a copy. It costs nothing and preserves the exemption.

Don't transfer the home to children during the lookback period. A home transfer within 60 months of the Medicaid application triggers a transfer penalty — calculated by dividing the home's fair market value by the nursing home's monthly private-pay rate. On a $200,000 home at $9,000/month, that's a 22.22-month penalty period, or about 22 full months plus a fractional month; DHHS applies the fractional month under its share-of-cost rules.

If the caregiver exemption might apply, get the physician's letter now. Don't wait until after the parent dies to try to prove a child was providing care. The attestation should be written while the parent is still living and the physician can verify the care relationship.

Understand what estate recovery actually costs. DHHS files a claim for the total Medicaid benefits paid on the recipient's behalf after age 55 — including nursing home costs, hospital stays, and prescription drugs. On a multi-year nursing home stay, that claim can easily exceed $200,000. Funeral and burial expenses are paid with priority over the state's claim, but the remaining estate is exposed.

For families working through these decisions, the Nebraska Medicaid Long-Term Care & Asset Protection Guide includes an estate recovery protection checklist and a step-by-step breakdown of each exemption, including the documentation you need to establish before the Medicaid application.

See more Nebraska guides →