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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- 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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- 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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- What Changed for 2026
- 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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- 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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- 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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- 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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- 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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- 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.