Medicaid Planning Attorney in NYC

Why Medicaid Planning Matters in New York

Long-term care in New York City is extraordinarily expensive. A semi-private room in a Manhattan nursing home runs $14,000 to $16,000 per month, with private rooms often exceeding $18,000; facilities in Brooklyn, Queens, and the Bronx typically run $12,000 to $15,000. Over a year, that translates to $150,000 to $216,000 — and the average nursing home stay in New York lasts roughly two and a half years, meaning a single extended illness can consume $400,000 or more. Home care is not necessarily cheaper: a licensed home health aide costs $27 to $35 per hour, 24-hour live-in care can exceed $20,000 per month, and assisted living ranges from $5,500 to $12,000 monthly.

Medicare does not pay for custodial long-term care — it covers only up to 100 days of skilled nursing following a qualifying hospital stay. Private long-term care insurance helps if you have it, but premiums have risen sharply and many policies cap benefits well below actual New York City costs. For most families, Medicaid is the only realistic option for covering extended care. But Medicaid is a means-tested program with strict income and asset limits, and without proper planning, qualifying means spending down virtually everything you own — savings, investments, and potentially even the equity in your home — before the government will step in to pay.

Medicaid planning is the process of structuring your finances and assets — legally and in advance — so you can qualify for benefits when you need them without losing everything your family has built. Done correctly and with enough lead time, a substantial portion of your assets can be protected under New York law. Done incorrectly — or not at all — the consequences are severe: unadvised transfers within the five-year lookback period trigger penalty periods during which Medicaid will not pay for nursing home care, leaving the applicant with no coverage and no remaining assets. In New York City, even modest gifts to children can result in months of ineligibility.

New York Medicaid Eligibility Rules

Understanding Medicaid eligibility in New York requires distinguishing between two separate programs with different rules: Community Medicaid (which covers home care and community-based services) and Institutional Medicaid (which covers nursing home care). The income and asset limits, lookback periods, and application processes differ between the two.

Income Limits

For 2026, the income limit for a single individual applying for Medicaid in New York is $1,732 per month (the federal benefit rate plus a $20 disregard). However, New York has a “Medicaid surplus” or “spend-down” program that allows individuals with income above this threshold to still qualify by paying the excess income toward their care costs each month. For married couples where one spouse is applying for nursing home Medicaid, the community spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) of approximately $3,948 per month in 2026, designed to prevent spousal impoverishment.

Income above the Medicaid threshold does not automatically disqualify someone from benefits. A Medicaid-eligible nursing home resident whose Social Security and pension exceed the limit simply pays most of their income to the facility each month, with Medicaid covering the remaining cost. The resident keeps a small Personal Needs Allowance (currently $50 per month) for personal expenses.

Asset Limits

The asset limit for a single Medicaid applicant in New York is $32,100 in 2026. Countable assets include bank accounts, stocks, bonds, mutual funds, certificates of deposit, IRAs (in some cases), annuities, life insurance with a cash value exceeding $1,500, and any real property beyond a primary residence. For married couples, the community spouse is permitted to retain a Community Spouse Resource Allowance (CSRA) of up to $157,920 in 2026, while the applicant spouse must have no more than $32,100 in countable assets.

Certain assets are exempt and not counted toward the limit. The primary residence is generally exempt as long as the applicant intends to return home or a spouse, minor child, or disabled child resides there — but the home’s equity must not exceed $1,097,000 in 2026 (unless a spouse or dependent child lives there, in which case no equity limit applies). One vehicle, personal belongings, household goods, prepaid burial plans, and certain life insurance policies are also exempt.

The Spend-Down Trap

Families who are not aware of Medicaid’s asset limits often discover them only when a parent or spouse is already in a nursing home. At that point, the applicant must “spend down” excess assets by paying for care privately until they reach the $32,100 limit. For a family with $300,000 in savings, that means paying out of pocket for roughly 20 months of nursing home care before Medicaid kicks in — losing the vast majority of their savings in the process. This is exactly the scenario that proactive Medicaid planning is designed to prevent.

The Five-Year Lookback Period

The most critical timeline in Medicaid planning is the lookback period. When someone applies for nursing home Medicaid in New York, the Department of Social Services reviews all financial transactions for the preceding 60 months (five years). Any transfer of assets for less than fair market value during that window — gifts to children, transfers to family members, adding someone to a deed, even certain charitable donations — triggers a penalty period during which Medicaid will not cover nursing home costs.

How the Penalty Is Calculated

The penalty period is calculated by dividing the total value of all uncompensated transfers by the regional rate for nursing home care. In the New York City area, the penalty divisor for 2026 is approximately $15,188 per month (this figure is updated annually by the New York State Department of Health). So if a Medicaid applicant gave $150,000 to their children within the five-year lookback period, the penalty would be roughly 9.9 months — nearly 10 months during which Medicaid will not pay for nursing home care, and the applicant has no money left to pay privately.

The penalty period does not begin on the date of the transfer. It begins on the date the applicant is otherwise eligible for Medicaid and in a nursing home. This means the penalty hits at the worst possible time — when the person needs care, has already spent down their assets, and has no way to pay for it. The result can be catastrophic, leaving families scrambling to find resources or facing facility discharge threats.

Exempt Transfers

Not all transfers trigger a penalty. Under federal and New York State law, the following transfers are exempt from the lookback:

Understanding which transfers are exempt and which are penalized is essential to any Medicaid plan. Many families inadvertently trigger penalties by making well-intentioned gifts — adding a child to a bank account, paying a grandchild’s tuition directly (which may not be exempt under New York Medicaid rules the way it is for gift tax purposes), or transferring a home to children without understanding the consequences.

Medicaid Asset Protection Strategies

A Medicaid planning attorney uses a range of legal strategies to help families protect assets while maintaining or achieving Medicaid eligibility. The right approach depends on timing, family circumstances, the nature of the assets, and whether care is needed now or in the future.

Medicaid Asset Protection Trusts (MAPTs)

The Medicaid Asset Protection Trust is the cornerstone of proactive Medicaid planning in New York. A MAPT is an irrevocable trust designed specifically to hold assets outside the applicant’s name so they are not counted for Medicaid eligibility purposes — provided the transfer occurred more than five years before the Medicaid application.

When properly drafted, a MAPT allows the grantor to retain certain benefits. Income generated by assets in the trust can be paid to the grantor. If a home is transferred into the trust, the grantor can continue living in it rent-free under a retained right of use and occupancy. The trust can also preserve the home’s eligibility for the capital gains exclusion on a primary residence. However, the grantor cannot access the principal — that restriction is what makes the assets non-countable for Medicaid.

The key limitation of a MAPT is the five-year lookback. Assets must be in the trust for a full 60 months before the grantor applies for nursing home Medicaid. If care is needed before the lookback period expires, the transferred assets will be treated as penalizable transfers and a period of ineligibility will be imposed. This is why starting the planning process early — ideally while you are still healthy and independent — is so important.

Spousal Refusal

New York is one of the few states that permits “spousal refusal” as a Medicaid planning strategy. Under New York Social Services Law §366(3)(a), a community spouse can refuse to make their income and resources available to the institutionalized spouse. When a spousal refusal is filed, the applicant spouse can qualify for Medicaid based on their own resources alone, while the community spouse retains the couple’s joint assets.

Spousal refusal is a powerful tool, but it carries risks. The state has the right to pursue the refusing spouse for reimbursement of Medicaid benefits paid on behalf of the institutionalized spouse. In practice, the state does sometimes bring these claims, typically through the Office of the Medicaid Inspector General. A Medicaid planning attorney can advise whether spousal refusal is appropriate for your situation and help mitigate the risk of a recovery action through complementary planning strategies.

Caregiver Child Exemption

Federal and New York law provide an important exemption for transfers of a home to a “caregiver child.” If an adult child lived in the parent’s home for at least two years immediately preceding the parent’s admission to a nursing home and provided a level of care that demonstrably delayed the need for institutional placement, the home can be transferred to that child without triggering a Medicaid penalty. This exemption can protect a significant asset — in New York City, where homes and apartments can be worth $500,000 to $2 million or more, the savings are substantial.

The exemption requires thorough documentation. The child must demonstrate that they actually resided in the home (not merely visited), and the care they provided must have been substantial enough that it delayed the parent’s need for a nursing facility. Medical records, physician statements, and evidence of the caregiving arrangement are essential to support the claim.

Exempt Assets and Countable Assets

Part of effective Medicaid planning involves converting countable assets into exempt assets where possible. For example, paying down a mortgage on a primary residence, making home improvements, purchasing a prepaid irrevocable burial plan, or buying exempt household goods can all reduce the countable estate without triggering a transfer penalty. These strategies are particularly useful when there is limited time before a Medicaid application must be filed.

Pooled Supplemental Needs Trusts

For individuals over age 65 who have excess income or assets, a pooled supplemental needs trust administered by a nonprofit organization can be a valuable tool. Under New York law, a Medicaid applicant can deposit surplus income into a pooled trust each month, which pays for expenses that Medicaid does not cover — such as phone bills, cable, clothing, or supplemental food. The income deposited into the trust is not counted against the Medicaid income limit. This strategy is especially common for Community Medicaid applicants in New York City who have Social Security or pension income that exceeds the Medicaid threshold.

Annuities

A Medicaid-compliant annuity can convert a lump sum of countable assets into an income stream, effectively reducing the applicant’s countable resources. To comply with federal and New York Medicaid rules, the annuity must be irrevocable, non-assignable, actuarially sound (based on the applicant’s life expectancy), and must name the state of New York as the primary beneficiary up to the amount of Medicaid benefits paid. Annuity planning is most commonly used in spousal situations where the community spouse needs to protect excess resources above the CSRA.

Crisis Medicaid Planning

Ideally, Medicaid planning begins five or more years before care is needed. But many families first consult an attorney after a parent has already been admitted to a hospital or nursing home. This is known as crisis Medicaid planning, and while the options are more limited, they are not nonexistent.

Crisis planning involves strategies that can be implemented quickly to protect at least a portion of the family’s assets even when the five-year lookback period has not been satisfied. The most common approach is sometimes called the “half-a-loaf” strategy.

The Half-a-Loaf Strategy

Under this approach, the applicant transfers approximately half of their excess assets to family members (triggering a penalty period) and uses the remaining half to pay privately for nursing home care during the penalty period. The transfer amount and retained amount are calculated so that the private-pay funds run out at roughly the same time the penalty period ends, at which point the applicant qualifies for Medicaid. The result is that roughly half the assets are preserved for the family rather than being spent entirely on care.

This strategy requires precise calculations based on the current regional penalty divisor, the facility’s private-pay rate, and the applicant’s income. Even small errors can leave a gap — a period where the money has run out but the penalty has not yet expired — creating a crisis within a crisis. An experienced Medicaid planning attorney in NYC can model these numbers accurately and build in appropriate margins.

Other Crisis Options

Additional crisis strategies may include spousal refusal (discussed above), converting countable assets to exempt assets (paying down a mortgage, purchasing a burial plan, making home repairs), purchasing a Medicaid-compliant annuity for the community spouse, and in some cases, establishing a short-term promissory note that meets Medicaid’s requirements for fair market value. Each of these tools has specific legal requirements under New York law, and using them incorrectly can result in additional penalties rather than savings.

How We Can Help You With Medicaid Planning in New York

Medicaid planning is not something most families can navigate on their own — and the cost of getting it wrong is not abstract. A transfer made at the wrong time, an application filed without the right documentation, or an asset structure that doesn't hold up under HRA scrutiny can result in months of ineligibility at $12,000 to $18,000 per month. By the time the error is discovered, the damage is often already done.

Our firm handles Medicaid planning for both situations: families who are planning ahead and have time to do it properly, and families who are already in crisis and need to act quickly with whatever options remain.

For proactive clients, we design a long-term plan built around your specific assets, family structure, and care goals — typically centered on a Medicaid Asset Protection Trust, with coordinating documents including a durable power of attorney, healthcare proxy, and any necessary estate planning updates. We explain the tradeoffs clearly, model the numbers, and structure everything to satisfy New York Medicaid's requirements so the plan actually works when you need it.

For crisis clients — families who learned yesterday that a parent needs a nursing home and have no plan in place — we move quickly to assess what options are still available. The half-a-loaf calculation, spousal refusal, exempt asset conversions, caregiver child exemptions — the strategies that apply depend on the specific facts, and time genuinely matters. Every week of delay while paying privately is money that could potentially have been protected.

We also handle the Medicaid application itself: preparing and organizing the full five years of financial documentation that HRA requires, responding to requests for additional information, and advocating at fair hearings if benefits are denied or a penalty is incorrectly calculated. The application process in New York City is bureaucratically demanding, and having counsel who knows what HRA is looking for — and what they sometimes get wrong — can make a significant difference in both outcome and timeline.

Medicaid planning is not a one-size-fits-all process, and the rules change regularly. We stay current on New York Medicaid regulations, eligibility thresholds, and lookback requirements so our clients don't have to. If you're not sure where to start or whether it's already too late to plan, a free consultation will give you a clear picture of where things stand and what can still be done.

Areas We Serve

The Law Offices of Vlad Portnoy, P.C. is based in Midtown Manhattan at 450 7th Ave, Suite 1500, and serves clients across all five boroughs of New York City. We meet with clients in person at our Manhattan office, or by phone and video call — whichever works best for your situation.

If you're looking for a lawyer that specializes in medicaid planning in your area, explore the pages below for information specific to your borough:

• Manhattan — Our home office, centrally located in Midtown at 450 7th Ave, Suite 1500, with easy access from across the city.
• Brooklyn — Serving families across all Brooklyn neighborhoods, from Bay Ridge and Bensonhurst to Crown Heights, Flatbush, and beyond.
• Queens — Helping Queens families in Flushing, Bayside, Forest Hills, Jamaica, Astoria, and throughout the borough.
• The Bronx — Serving Bronx residents in Riverdale, Kingsbridge, Morris Park, Mott Haven, and surrounding communities.
• Staten Island — Providing legal guidance for Staten Island families with flexible in-person, phone, and video consultations.

Frequently Asked Questions About Medicaid Planning in New York