When a parent needs long-term care, many California families quickly discover just how expensive that care can be. Nursing homes and assisted living facilities can cost $8,000–$12,000 per month or more, and very few families can afford that long-term out of pocket.
That’s when Medi-Cal (California’s Medicaid program) often enters the conversation — and with it, an important question:
Should we sell the house to qualify for Medi-Cal?
The answer isn’t always straightforward. Selling a home can help pay for care, but it can also impact Medi-Cal eligibility, future estate recovery, and taxes if it’s not handled carefully.
This guide explains what families need to know before selling a house to qualify for Medi-Cal — and how to avoid costly mistakes.
For a broader overview of navigating this situation, see our full guide on selling a parent’s house to pay for care in California.
What Is Medi-Cal and Why the House Matters
Medi-Cal is California’s version of Medicaid and is the primary program that pays for long-term nursing home care once a person meets medical and financial eligibility requirements.
While many assets are considered when determining eligibility, the family home is often the most confusing and emotionally charged.
Here’s why:
- A primary residence is sometimes considered an exempt asset
- But it can still be subject to estate recovery later
- Selling the home converts an exempt asset into countable cash
Understanding this distinction is critical before making any decisions.
The California Department of Health Care Services (DHCS) outlines Medi-Cal eligibility and estate recovery rules here:
Does Medi-Cal Force You to Sell the House?
No — Medi-Cal does not require you to sell the home to qualify.
In many cases, a parent can qualify for Medi-Cal while still owning their primary residence, especially if:
- The parent intends to return home (even if unlikely)
- A spouse still lives in the home
- A minor or disabled child lives there
However, while the home may be exempt during life, it can still be targeted later through Medi-Cal estate recovery after death.
This is where many families get caught off guard.
When Selling the House Might Make Sense
Selling the home can be the right move in certain situations.
To Pay for Immediate Care Costs
If Medi-Cal approval is delayed or the care facility requires private pay upfront, selling the home may provide the cash needed to:
- Cover initial care costs
- Pay for assisted living (which Medi-Cal often does not cover)
- Avoid borrowing or draining other assets
Example:
A family in Glendale sold their mother’s home to fund 18 months of assisted living before transitioning her to a Medi-Cal-approved nursing facility.
To Avoid Estate Recovery Later
If the home remains in the parent’s name and Medi-Cal pays for care, the state may seek reimbursement from the estate after death.
Selling the home earlier — and using proceeds strategically — can sometimes:
- Reduce or eliminate estate recovery
- Allow families to control how funds are used
- Prevent forced sales later during probate
DHCS explains Medi-Cal estate recovery rules here.
The Risk of Selling at the Wrong Time
Selling a house without proper planning can actually delay Medi-Cal eligibility.
When a home is sold, the proceeds become countable assets. If the parent’s assets exceed Medi-Cal limits, they may become temporarily ineligible until those funds are “spent down” correctly.
Improper spending can cause penalties or delays.
The California Department of Aging explains asset limits and spend-down rules.
How Proceeds Are Typically Used (Spend-Down Rules)
After selling the home, funds are often used for:
- Medical bills and care costs
- Facility expenses
- Home care services
- Paying off debts
- Funeral and burial planning
What you should not do:
- Gift money to family without guidance
- Transfer large sums without documentation
- Attempt to hide assets
The Elder Justice Initiative (U.S. DOJ) warns that improper transfers can trigger penalties.
Look-Back Rules (What Families Should Know)
California currently has more flexible Medi-Cal look-back rules than many states, but that doesn’t mean planning isn’t necessary.
Certain asset transfers can still be scrutinized, and rules may change.
Because of this, families are strongly encouraged to:
- Speak with an elder law attorney
- Coordinate timing carefully
- Document everything
Selling the House — Traditional vs As-Is
Once the decision to sell is made, families usually choose between two paths.
Traditional Sale (MLS)
Best when:
- The home is in good condition
- There’s time to wait
- Maximizing price is a priority
Downsides:
- Repairs and prep costs
- Long timelines
- Buyer financing risk
Selling As-Is to a Cash Buyer
Best when:
- The home needs work
- Care costs are urgent
- Probate or legal complexity exists
- The family wants simplicity
Cash buyers:
- Don’t require repairs
- Close quickly (often 7–14 days)
- Allow families to move forward faster
Example:
A Los Angeles family sold their father’s home as-is to cover immediate nursing care costs and avoided months of delays and carrying expenses.
Tax Considerations When Selling
Selling a parent’s house can trigger tax questions, including:
- Capital gains
- Step-up in basis
- How timing affects tax exposure
This is especially important if the home appreciated significantly.
The IRS explains step-up in basis rules.
Working with a CPA can help minimize unnecessary tax liability.
What Families Should Do Before Selling
Before listing or accepting an offer, families should:
- Confirm Medi-Cal eligibility rules
- Understand estate recovery implications
- Review who has legal authority to sell
- Speak with an elder law attorney if possible
- Decide whether speed or price is the priority
Planning first can save tens of thousands of dollars later.
Final Thoughts
Selling a house to qualify for Medi-Cal isn’t a one-size-fits-all decision. In some cases, keeping the home makes sense. In others, selling provides the cash and clarity families need to move forward with care.
The key is understanding how selling affects eligibility, estate recovery, and taxes — and choosing the option that best supports your parent’s care and your family’s peace of mind.
At Mrs. Property Solutions, we’ve helped many California families navigate this exact situation by buying homes as-is and on flexible timelines. If you’re weighing whether selling makes sense — or need to move quickly — we’re happy to talk through your options with no pressure.