Understanding Long-Term Care & Asset Protection

INTRODUCTION

Medicaid is the primary payer for long-term care in New York. This guide provides the 2026 financial thresholds and rules to help you protect your legacy while securing necessary care.

TYPES OF MEDICAID PROGRAMS

* COMMUNITY MEDICAID: Often called “Home Care,” this covers home health aides, personal care assistants, and adult day care while you reside in your home or an assisted living facility.

* NURSING HOME MEDICAID: Known as “Institutional Medicaid,” this covers 24/7 skilled nursing facility care.

* MEDICAID FOR THE ABD: Provides standard health insurance for those 65+ or with a qualifying disability.

2026 FINANCIAL ELIGIBILITY LIMITS

To qualify, your “countable” income and assets must fall below these New York state thresholds.

SINGLE APPLICANT:

* Monthly Income Limit: $1,835.40

* Asset/Resource Limit: $32,396.00

MARRIED COUPLE (Both Applying):

* Monthly Income Limit: $2,488.60

* Asset/Resource Limit: $43,781.00

*Note for Nursing Home Residents: Once admitted, you are generally required to contribute all income toward the cost of care, keeping only a $50/month Personal Needs Allowance.*

THE “LOOK-BACK” RULES (CRITICAL CAVEAT)

New York treats asset transfers differently depending on the type of care you seek.

* NURSING HOME CARE: There is a strict 60-month (5-year) look-back period. Any gifts or transfers for less than fair market value made within 5 years of your application will trigger a “penalty period” of ineligibility.

* COMMUNITY/HOME CARE: The 30-month look-back is NOT in effect. As of early 2026, the proposed 2.5-year look-back for home care has still not been implemented by the New York State Department of Health.

* Advantage: Currently, individuals can transfer assets and qualify for Home Care Medicaid in the following month without penalty.

* Risk: This “window of opportunity” remains open for now but can be closed by the state with minimal notice.

EXEMPT ASSETS: WHAT YOU ARE ALLOWED TO KEEP

The following assets do not count toward the resource limit:

* PRIMARY RESIDENCE: Exempt up to $1,130,000 in equity if you or a spouse live there.

* RETIREMENT ACCOUNTS: IRAs and 401(k)s are exempt if they are in “payout status” (taking at least the Required Minimum Distribution).

* ONE VEHICLE: One car of any value is permitted.

* BURIAL FUNDS: An irrevocable burial trust of any amount or a designated $1,500 burial fund.

 

SPOUSAL PROTECTIONS (PREVENTING IMPOVERISHMENT)

If only one spouse needs care, the spouse staying at home (the “Community Spouse”) is allowed to keep significantly more.

* RESOURCE ALLOWANCE (CSRA): The spouse at home can keep up to $162,660 in assets.

* MONTHLY INCOME ALLOWANCE (MMMNA): The spouse at home is entitled to a minimum monthly income of $4,066.50.

 

PLANNING STRATEGIES FOR EXCESS INCOME & ASSETS

If you exceed the limits, you can still qualify using these legal tools:

* POOLED INCOME TRUSTS: Allows you to “spend down” excess monthly income on your own living expenses (rent, utilities) so it isn’t taken by Medicaid.

* SPOUSAL REFUSAL: A legal right in New York where a spouse refuses to make their income or assets available for the applicant’s care.

* MEDICAID ASSET PROTECTION TRUSTS (MAPT): An irrevocable trust used to protect a home or savings from the 5-year nursing home look-back.

IMPORTANT DISCLAIMER

Medicaid laws are complex and subject to frequent updates. This document is for informational purposes and does not constitute legal advice. Consult with an elder law attorney to create a plan tailored to your specific situation.

FALCONE LAW FIRM

www.falconeattorney.com | 631-607-4529

Offices in Commack, Hauppauge, and Melville

What New York Residents Need to Know

(Especially Important for Nursing Home Care)

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The Bottom Line

New York has changed how Medicaid works in 2026.

Some changes make Medicaid stricter and more expensive when someone has given away money or property. Other changes make the application process simpler. Both are important to understand before applying for Medicaid.

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1. What Is a Medicaid Transfer Penalty?

If a person gives away money or property, or sells something for less than it is worth, and later applies for nursing home Medicaid, New York may impose a penalty period.

A penalty period means:
* Medicaid will not pay for nursing home care for a certain number of months
* The nursing home must be paid out-of-pocket during that time

Important:
* These penalties mainly apply to nursing home Medicaid
* They generally do not apply to basic “Community Medicaid”

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2. How New York Calculates the Penalty

New York does not use one statewide number. Instead:

* The State is divided into regions (New York City, Long Island, Hudson Valley, Central NY, Western NY, etc.)
* Each region has a monthly nursing home cost
* The penalty is calculated as follows:

> Amount given away ÷ Regional monthly nursing home cost = months Medicaid will not pay

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3. What Changed for 2026
4. Nursing Home Cost Numbers Are Higher

For 2026, New York increased the regional nursing home cost numbers.

What this means:
* The same gift now causes a longer Medicaid penalty than in prior years
* Even modest gifts can result in many months without Medicaid coverage

Example:
* Years ago, a gift might have caused a 6–7 month penalty
* In 2026, that same gift could cause 9–12 months of private pay, depending on the region

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1. Timing Matters More Than Ever

A very important rule:

Medicaid uses the nursing home rate in effect when you APPLY — not when the gift was made.

This means:
* Gifts made years ago are still affected by today’s higher rates
* Waiting to apply can make the penalty worse

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1. Penalties Can Be Long and Severe

* There is no maximum penalty length
* Partial months still count
* Medicaid will not help during the penalty — even if the person has no money left

Families are often shocked to learn that Medicaid provides no assistance at all during the penalty period.

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1. Medicaid Planning Is Riskier Now

Because of:
* Higher regional rates
* Strict enforcement by Medicaid offices
* Less flexibility than in the past

Mistakes in planning can now result in huge nursing home bills.

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4. What Medicaid NO Longer Requires (Good News)

While some rules are stricter, New York Medicaid has also made one helpful change.

You No Longer Have to Apply for Other Benefits First

In the past, Medicaid often required applicants to:
* Apply for Social Security or other benefits first
* Prove those applications were filed before Medicaid would approve coverage

This is no longer required.

Medicaid:
* Will not force you to apply for other benefits
* Will not delay or deny Medicaid because another benefit application was not filed
* Can process Medicaid more quickly and with less paperwork

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Important Clarification

* Medicaid still counts income you actually receive
* But Medicaid cannot force you to chase other benefits just to qualify

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5. Key Takeaways

* Giving away money or property can delay Medicaid coverage
* Delays are now longer in 2026 due to higher nursing home cost numbers
* Medicaid uses the rate in effect when you apply, not when gifts were made
* Poor planning can lead to months of uncovered nursing home bills
* The application process is simpler, but the financial risks are higher

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Final Thought

Medicaid rules are changing quickly, and outdated advice can be costly. Advance planning is more important than ever, especially before nursing home care is needed.

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This handout is for general educational purposes and is intended for client distribution.