Maryland residents in nursing homes who own property but cannot pay for their medical care no longer will have to sell their houses to qualify for government-sponsored Medicaid coverage under new regulations being drafted by the state Department of Health and Mental Hygiene.

If implemented as planned in July, the regulations would allow the state to place a lien on the homes of some elderly patients who need help, allowing them to keep their property while continuing to receive Medicaid benefits. Senior citizen groups had lobbied for such legislation, saying that it added to the peace of mind of the patients to be able to keep their homes as long as possible.

Placing a lien will allow the state to recoup the funds paid for Medicaid coverage after the patient's death. The patient still can rent or sell the house at any time, but any funds received would have to be used toward medical care.

The liens would be placed only when the residents of nursing homes have no dependents and have no assets other than their homes. About 500 Maryland Medicaid recipients fall into this category, according to Maryland health department spokesman F. DeSales Meyers. Many senior citizens do not apply for Medicaid after learning that they may have to sell their homes to qualify, he said.

Maryland is the fourth state to make such provisions for older persons, said officials at the U.S. Department of Health and Human Services. The other states are Alabama, California and Rhode Island. Federal law allows states to place the liens, but states do not have to exercise this option.

Del. Marian L. Patterson (D-Prince George's) sponsored a bill in the just-ended session of the Maryland legislature that would have established a lien process. Patterson, who withdrew her bill after the health department indicated that it would take the action itself, said the new regulations should benefit both older persons and the state.

"The way the law is set up now, patients must sell their homes, and then they become 'private pay patients' " who do not receive state assistance, Patterson said. "When the money is used up, the patient goes on Medicaid again -- and the state gets nothing in return.

"With the lien, the state can recoup its losses, because the lien covers whatever the state paid in Medicaid funds. Everyone wins in the long run," she said.

Reed Dewey, a spokesman for Betterment for United Seniors Inc., a senior citizen advocacy group that lobbied for the lien process, called the planned regulation "a great victory for senior citizens, who no longer have to choose between their health and their homes."

Specifics of the lien process have not been worked out, said health department spokesman Meyers, but the department will meet with senior citizen groups before drafting a final version of the ordinance. A public hearing will be held after the ordinance is drafted.

Sophie Miller, 84, a homeowner from Riverdale, said she thinks the new lien provisions are fair. "All we're talking about here is delaying sale of the house until the senior citizen has passed away," she said.

Mildred Clatterbaugh, 67, of Lanham, said her mother had to sell her home last year because keeping it made her ineligible for Medicaid. According to Clatterbaugh, fixing up and selling the house was an exercise in futility.

"What did we have left to show for all these months of anguish and hard work? Money which will be spent in less than 18 months," Clatterbaugh said. "And then she'll go back on Medicaid again. Twenty years of my mother's hard work and pride gone, just like that."

Clatterbaugh added that the sale of the house had had a disastrous effect on her mother's emotional and physical well-being.

Miller believes this is common with older persons who are forced to sell their houses. "My home represents more than just a piece of real estate worth 'X' amount of money," she said. "For me, no monetary price is equal to my home. My home represents a hope for the future. Selling it would be like giving up.

"Knowing that my state is treating me with respect right up to the time I die is important to me. I think society owes me more than to take my home away."