The result is that when they sell the property they will have to pay a much higher tax on capital gains than they would have if they had inherited it. Although Medicaid is federally funded, it is administered at the state level, and each state has its own set of rules and regulations pertaining to this program. Health insurance is a type of insurance coverage that pays for medical and surgical expenses that are incurred by the insured. Be very, very careful before making transfers. The Henry J. Otherwise, at the community spouse’s death, the home and other assets of the community spouse will go to the nursing home spouse and have to be spent down. Medicaid eligibility can be a complicated issue.