First, the answer to your question depends on which Medicaid program the applicant is applying and several other factors. Under New York law, a certified disabled child must live in the Medicaid applicant's home in order for the home to be considered exempt as a resource in qualifying for Medicaid, and to prevent a lien from being placed on the home while on Medicaid. A better option may be to consider a transfer of the home to the disabled child. A transfer of a homestead to a certified blind or disabled child in New York is not penalized.
You should speak to a qualified elder law attorney before making an application for Medicaid or transferring any assets. Medicaid eligibility is a very complex area of the law and many different factors affect Medicaid eligibility.