The new One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, includes several important changes that could impact seniors, individuals with disabilities, and their families — especially those planning for long-term care, Medicaid, and special needs trusts.
Here’s what you need to know:
Key Changes to Medicaid for Long-Term Care
If you or a loved one may need nursing home care in the future, here are some important updates:
- Home Equity Limit for Medicaid:
Starting January 1, 2028, if you apply for long-term care Medicaid and own a home with equity over $1 million, you may no longer qualify for benefits — even if you meet other requirements.
(Note: This new limit is not adjusted for inflation.) - Shortened Retroactive Coverage:
Beginning in 2027, Medicaid will only cover medical expenses for 2 months prior to the application date instead of 3 months. This means it’s more important than ever to plan ahead and apply as soon as care is needed. - Delay in Medicaid Simplification Rules:
A set of federal rules meant to make Medicaid easier to navigate — including simpler enrollment and clearer staffing rules for nursing homes — will be put on hold until 2035 or later. - More Support for Home-Based Care and Rural Hospitals:
The good news: The law includes increased funding for home care services and rural healthcare facilities — a step toward making care more accessible outside of nursing homes.
Changes for ABLE Accounts and Social Security
- ABLE Accounts (for individuals with disabilities):
The increased limits on how much can be contributed to ABLE accounts (tax-advantaged savings for people with disabilities) are now permanent. Adjustments for inflation will begin starting in 2026. - Extra Tax Deduction for Seniors:
From 2025 through 2028, individuals 65 and older will receive an additional $6,000 tax deduction.
This phases out for singles earning more than $75,000, or couples earning over $150,000.
Why This Matters
- The new home equity limit could impact eligibility for many homeowners — particularly in high-cost states like California — so it’s critical to plan early and explore options like trusts or gifting strategies.
- The shorter retroactive window for Medicaid means families must be extra careful not to delay applications.
- Positive developments like the permanent ABLE account expansion and additional support for home care are welcome news for families seeking flexibility and independence.
We’re Here to Help
If you or a family member may need long-term care or have questions about Medicaid, special needs planning, or senior benefits — we’d be happy to walk you through how these changes might affect you.
Planning ahead can make a huge difference in protecting assets and accessing care when it’s needed most.