Proposed Medicaid cuts harm DC homeowners by placing a rigid federal cap on home equity that would disqualify many longtime residents—especially older adults—from receiving Medicaid long-term care coverage. The change would lower DC’s current protection level and destabilize homeownership for seniors who rely on their residence as their only major asset.

Why the DC Home Equity Cap Matters for Medicaid Eligibility

Washington, DC—home to approximately 678,000 residents—has one of the highest housing costs in the country. Many longtime homeowners, particularly Black residents and working-class families, have built up substantial equity over decades while living on modest incomes. Under the proposed change, these residents could be denied Medicaid eligibility for long-term care, solely because their home equity exceeds a new national threshold.

Currently, DC allows individuals to qualify for Medicaid long-term care eligibility with home equity up to $1,097,000. But the congressional proposal would cap that at $1 million starting in 2028—with no adjustment for inflation. As housing prices continue to rise, more DC homeowners would fall outside the eligibility criteria even if they have no income or savings.

Reverse Mortgage and Medicaid: Not a Real Solution

Some argue that seniors could take out a reverse mortgage or home equity loan to qualify for benefits. But that solution doesn’t work in practice:

• Reverse mortgages require the homeowner to live in the home. Once the individual enters a nursing home or assisted living facility, the loan becomes immediately due.

• This typically results in a forced home sale, and the resulting cash proceeds:

  • Disqualify the applicant from Medicaid due to excess assets

  • Leave no home to return to

  • Eliminate the ability to pass the home on to children or grandchildren

In short, using a reverse mortgage to spend down home equity does not preserve Medicaid eligibility and often leads to disqualification and housing loss.

Impact on Intergenerational Wealth and the Racial Wealth Gap in DC

For many DC families—especially Black and immigrant households—the home is the only significant asset that can be passed down to future generations. This proposed policy would require seniors to liquidate their primary asset just to receive basic care, effectively breaking the cycle of intergenerational wealth.

• The proposal ensures that wealth built over a lifetime is lost at the moment of greatest vulnerability

• It further widens the racial wealth gap in DC, removing one of the few available tools for financial stability and equity

• It punishes aging in place and careful homeownership by penalizing those who have stayed and invested in their communities

Aging in Place and the Future of DC Medicaid Planning

This proposal undermines efforts by local policymakers and elder law professionals to support aging in place in DC. Many residents have planned responsibly, assuming that DC Medicaid planning protections would be there when they need long-term care. By imposing a hard federal cap, this proposal strips away that security.

The proposal also erases the value of Medicaid housing policy tailored to local realities. It binds DC to a one-size-fits-all rule that does not reflect local market conditions or the cost of living.

Ask Your Family and Friends to Help Save Your Home and Your Wealth

DC residents have no voting representation in Congress, but your family and friends in other states do.
If you live in DC and this policy concerns you:

• Tell your loved ones in other parts of the country how this will affect you and other homeowners in DC.

• Ask them to contact their representatives in the House and Senate—they have the power to stop this.

• Explain that this policy destroys intergenerational wealth and disqualifies people from care based on home value alone.

You can’t vote in Congress—but someone you love can. Ask them to stand up for your home, your care, and your future.

Bottom Line: Protect DC’s Seniors and Their Homes

This proposal doesn’t just tweak eligibility limits—it threatens home equity and Medicaid access for hundreds of DC seniors. It forces residents to choose between care and shelter. And it ensures that even those who worked hard to build security won’t be able to pass anything on to the next generation.

Proposed Medicaid cuts harm DC homeowners—and they harm the entire fabric of stable communities.