Nursing home care in New York costs anywhere from $13,000 to $18,000 a month. Even assisted living runs $5,000 to $8,000. For most families, those numbers are catastrophic. Medicare won't pay for long-term custodial care. Private insurance policies cover a fraction of the real cost. That leaves Medicaid — the joint federal-state program that pays for long-term care when you've run out of other options.

But here's what most people don't understand: Medicaid isn't just for people who are already broke. Medicaid planning is the legal process of restructuring your assets and income so you can qualify for Medicaid benefits while protecting as much of your wealth as possible for your spouse, your children, or your legacy.

I've spent over 20 years helping New York families navigate this. The families who come to me years before a health crisis can usually protect the majority of what they've built. The families who call after Dad is already in the memory care unit — they have far fewer options. That's not a scare tactic. That's just how the rules work.

Two Types of Medicaid in New York

Before we talk strategy, you need to understand the two distinct Medicaid programs in New York. They have different rules, different income limits, and different planning approaches.

Institutional Medicaid (Nursing Home Medicaid)

This pays for care in a skilled nursing facility — what most people call a nursing home. It's the most expensive type of care and triggers the most complex rules. The income limit for 2025 is $934 per month for an individual. The asset limit is $31,175 (this number adjusts annually).

This is also the program with the 60-month look-back period — more on that in a moment.

Community Medicaid (Home Care & Assisted Living)

Community Medicaid covers home health aides, adult day programs, and Medicaid-funded assisted living through the Assisted Living Program (ALP). New York eliminated the look-back period for community Medicaid in 2020 under MLTC (Managed Long Term Care) — though federal law may eventually reinstate it. For now, community Medicaid planning is more flexible, and the asset limits are different.

For 2025, a single applicant's resource limit for community Medicaid is $31,175. Income rules differ depending on the specific program.

The 60-Month Look-Back Period: What It Means

When you apply for nursing home Medicaid in New York, the state reviews every financial transaction you made in the 60 months — five years — before your application. They're looking for asset transfers made for less than fair market value. Gifts to children. Money moved into a trust. Property deeded away.

If they find disqualifying transfers, they impose a penalty period — a window of time during which Medicaid won't pay for your nursing home care. The penalty is calculated by dividing the total transferred value by the regional daily nursing home rate. In New York City, that divisor is currently around $400 per day.

So if someone transferred $120,000 in gifts within the look-back window, the penalty period would be roughly 300 days. That's 300 days of nursing home care the family has to pay out-of-pocket before Medicaid kicks in.

Common Mistake: Many families believe that giving away assets to children automatically protects those assets from Medicaid. It doesn't — if the gift happens within 60 months of a nursing home application, it creates a penalty period. Timing and method both matter enormously.

What Counts as an Asset for Medicaid?

Medicaid divides assets into two categories: countable and exempt.

Countable Assets

These count toward your resource limit and must be spent down or protected through planning:

Exempt Assets

These don't count toward the resource limit:

Important: Your home is exempt while you're living in it. But once you're in a nursing home and your home sits vacant, the state can place an estate recovery lien on it after you die. Proper planning can protect the home from that recovery.

Core Medicaid Planning Strategies

There's no one-size-fits-all answer. The right approach depends on your age, health status, assets, family situation, and how much time you have. Here are the main tools we use.

Medicaid Asset Protection Trust (MAPT)

A MAPT is an irrevocable trust you create while you're still healthy. You transfer assets — often the home, and sometimes investment accounts — into the trust. You lose direct control over those assets, but you can retain the right to live in the home and receive income generated by trust assets.

The critical advantage: assets transferred into a MAPT before the 60-month look-back window are completely protected from Medicaid consideration. If you funded the trust more than five years ago, Medicaid can't count those assets and can't impose a penalty.

I helped a Bronx family set up a MAPT for their parents in 2019. When the father entered a nursing home in late 2024 — more than five years after funding — the home and $180,000 in transferred investments were fully protected. The family didn't lose a dollar of it.

MAPTs require careful drafting. A poorly structured trust can inadvertently disqualify you or create tax problems. See our guide on how to protect assets with Medicaid planning for a deeper look at trust structures.

Pooled Income Trusts

For community Medicaid applicants whose income exceeds the Medicaid limit, a pooled income trust (also called a supplemental needs trust) solves the income problem. You deposit excess income into the trust each month, and the trust pays your bills — rent, utilities, medications not covered by Medicaid. The income in the trust doesn't count toward Medicaid eligibility.

This is a lifeline for home care. Without it, people earning more than $934 a month can't qualify for community Medicaid services. With a pooled income trust, they can.

Spend-Down

If you're in crisis — already in a nursing home or about to enter one — you may need to "spend down" excess assets. This doesn't mean burning through cash. You can legitimately spend down on exempt items: a prepaid burial plan, home improvements if you're returning home, medical equipment, paying off debts, and similar expenditures.

Spousal Planning

If one spouse needs nursing home care and the other stays home, New York law protects the community spouse's assets and income. The Community Spouse Resource Allowance (CSRA) lets the at-home spouse keep up to $154,140 in 2025. The Minimum Monthly Maintenance Needs Allowance (MMMNA) ensures the at-home spouse has sufficient monthly income.

Spousal refusal — where the at-home spouse legally refuses to contribute to the institutionalized spouse's care — is recognized in New York and can be a powerful crisis-planning tool. It's aggressive and comes with risks, but it's legal here.

Current New York Medicaid Limits (2025)

Program Income Limit (Individual) Resource Limit (Individual)
Nursing Home Medicaid $934/month $31,175
Community Medicaid (MLTC) $1,732/month $31,175
CSRA (Community Spouse) N/A Up to $154,140
Home Equity Limit (Community) N/A $1,033,000

Advance Planning vs. Crisis Planning

This distinction shapes every conversation I have with new clients.

Advance planning means you're working years ahead of a health crisis. You have time to set up a MAPT, let the look-back clock run, and protect the bulk of your estate. You're not rushed. You can choose the right structures and get the tax planning right too. Most families who do this protect 80 to 90 percent of their assets.

Crisis planning means someone is already in the hospital, or just got a dementia diagnosis, or is entering a nursing home next week. The options narrow significantly. You can still use spousal planning, spend-down strategies, and possibly annuities. But the MAPT is no longer available for nursing home planning purposes because you can't satisfy the five-year look-back from a hospital bed.

Here's the reality: I get calls every week from families who say "we should have done this five years ago." The ones who did plan five years ago are in a completely different position.

The best time to start Medicaid planning is when you're healthy, in your late 50s or 60s. The second best time is right now, whatever your age. Even partial planning beats no planning at all.

Common Medicaid Planning Mistakes

After more than two decades in this practice, I've seen the same mistakes over and over.

Gifting Assets Within the Look-Back Window

A Queens family came to me after their 78-year-old mother gifted $200,000 to her three children — all outright, no trust — and then needed nursing home care 18 months later. The penalty period was substantial. They had to cover months of care themselves. A proper trust, set up a few years earlier, would have avoided this entirely.

Putting Assets Directly in Children's Names

This approach seems simple but creates serious risks. If the child gets divorced, sued, or goes bankrupt, those "protected" assets are exposed to the child's creditors. And if the child predeceases the parent, the assets go through the child's estate — not back to the parent. A trust provides much stronger protection.

Ignoring the Home

The family home is often the largest asset, and it's often the most overlooked in planning. People assume it's protected because it's exempt. It is — during your lifetime. But without proper planning, Medicaid estate recovery can claim it after death. A MAPT or a life estate deed with proper drafting can prevent that.

Waiting for a Diagnosis

Once someone has a diagnosis that affects legal capacity — even early-stage dementia — their ability to create or modify a trust may be compromised. You need to plan while you're fully competent. I've had to turn away clients whose families came too late.

How an Elder Law Attorney Helps

Medicaid planning sits at the intersection of elder law, estate planning, tax law, and public benefits law. It's not a DIY project. The rules are complex, they change regularly, and the consequences of mistakes are severe.

A qualified elder law attorney will:

At Morgan Legal Group, we've guided more than 5,000 New York families through Medicaid planning and elder law matters. We know the New York City Department of Social Services rules, the Albany Medicaid reference guide, and the specific practices of local Medicaid units — all of which matter when you're doing the actual application.

You should also have a current healthcare proxy and valid will or trust in place before or alongside your Medicaid planning. These documents work together as part of a complete plan.

What Happens If You Don't Plan

Let me paint a picture. Maria, 82, from Staten Island, had a home worth $650,000 and about $220,000 in savings. She never did any Medicaid planning. She entered a nursing home in 2023 at $16,500 a month. Her savings were gone in 13 months. Then the home had to be sold to pay for her care — it didn't qualify for the residential exemption once she was in a nursing home and her husband had passed. More than $800,000 gone.

Had Maria's family done Medicaid planning five years earlier, the home and a significant portion of the savings could have been protected through a MAPT. Her children would have inherited a substantial estate. Instead, nothing was left.

That's not an extreme case. That's what happens routinely when planning doesn't happen. For more on the broader scope of elder law in New York, including guardianship and elder abuse protections, see our complete guide.

Starting the Conversation

You don't need to know exactly what you want when you call us. Most people come in confused and overwhelmed — that's completely normal. What I do in an initial consultation is listen to your situation, explain your options clearly, and give you an honest assessment of what planning can and can't accomplish for you.

There's no pressure. If you're not ready to move forward, I'll tell you what you need to know and let you think about it. But I'll also be honest: every year you wait is a year closer to the look-back window catching up with you.

If you have aging parents, even if they're healthy today, the time to start thinking about this is now. If you're over 60 yourself, the conversation is even more urgent. Estate planning for seniors in New York covers the healthcare proxy, power of attorney, and will elements that should accompany any Medicaid plan.