Can My Rental Income Pay Mortgage Instead of Nursing Home?

You are probably right, but it depends on your state Medicaid agency. In general, the net income from the house must be paid to the nursing home (or half of the net income in your case, since you are a co-owner). You should be able deduct the expenses from the gross income to determine the net income. But check with your state Medicaid agency to be certain.

For more information on how Medicaid treats income, click here