Medicaid Rules for Community Spouses

In 2026, the community spouse is allowed to keep their own income and, if necessary, receive a portion of the nursing home spouse鈥檚 income, up to approximately $4,066.50 per month. This is meant to ensure that basic living expenses such as housing, utilities, food, and other day-to-day costs can continue to be paid. For many families, this is an important protection that allows the spouse at home to maintain stability.

There are also important protections when it comes to assets. While the spouse applying for Medicaid is limited to maintain $33,038 in their own name, the spouse at home can retain approximately $74,820, or up to one-half of the couple鈥檚 total assets, with a maximum of $162,660. The applying spouse can also have retirement accounts as an additional asset. Beyond that, the primary residence is typically protected as long as the spouse, or minor or disabled child continues to live there. This often comes as a relief to families who are concerned about losing their home.

No Penalty for Asset Transfers Between Spouses

Another important point is that assets can be transferred to a spouse without triggering a Medicaid look-back penalty. This is different from transfers to other individuals, which can result in a period of ineligibility. Because transfers between spouses are allowed, there are often opportunities to protect assets even when planning has not been done in advance.

Spousal Refusal

New York also permits a strategy known as 鈥渟pousal refusal.鈥� While the name can sound concerning, it is simply a way for the spouse at home to retain assets and income in their own name while the spouse in need of care applies for Medicaid. So long as that document is timely filed with the application, the Medicaid agency will determine eligibility for the institutionalized spouse without considering the assets or income of the community spouse.

Planning Ahead is Key, But Couples Still Have Options

It is also important to understand the cost of care. Nursing homes in the New York area can cost approximately $15,000 per month, and in some cases even more, depending on the facility. Without proper planning, these costs can quickly deplete a family鈥檚 savings.

Even in a crisis, families often have more options than they realize. Planning ahead is always best, but there are often still steps that can be taken when care is needed.

By Britt Burner, Esq. and Alma Muharemovic聽 Esq.

Britt Burner, Esq. is the Managing Partner at 明星黑料, P.C. focusing her practice areas on Estate Planning and Elder Law. Alma Muharemovic, Esq. is an associate attorney at 明星黑料, P.C. practice on Estate Planning. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.

Medicaid Income and Asset Levels 2026

By law, the allowable income and asset limits for Medicaid are set at 138% of the Federal Poverty Level (FPL).

In 2026, a single applicant must have less than $33,038 in countable assets, an increase from $32,396 in 2025. For married couples, the resource limit is $44,796. Furthermore, the monthly income limit is $1,836 per month for single applicants, and $2,489 per month for married couples.

The countable assets consist of cash, bank accounts, stocks, bonds, non-qualified annuities, and cryptocurrency. The primary home is automatically exempt if the applicant鈥檚 spouse, child under 21 years old, or disabled child (of any age) resides there. If a single applicant is the only resident, the home is considered if the equity value is greater than $1,130,000 (in 2026). Homes with equity valued below this threshold are excluded.

Tax-deferred assets (鈥渜ualified accounts鈥�), such as retirement accounts and IRAs, are exempt, so long as the applicant is taking minimum distributions 鈥� that is, they must be in 鈥減ayout status.鈥� However, the value of these minimum distributions is counted towards the applicant鈥檚 monthly income limit.

Is There a Community Medicaid Lookback in NY?

New York does not have a 鈥渓ookback鈥� period for Community Medicaid programs, though the state plans to implement one in the future. Though Institutional Medicaid (i.e. nursing home care) applications have a 60-month lookback period, where the state closely scrutinizes all asset transfers to ensure that none were gifted or sold for less than fair market value, Community Medicaid applications do not require such scrutiny. While the New York State budget in 2020 included a provision for a 30-month lookback period for Community Medicaid, it is unclear when the state intends to impose this requirement.

What if Your Assets are Above the Threshold?

Prospective Community Medicaid applicants with assets over the threshold can transfer their excess to an Asset Protection Trust, with the help of an estate planning attorney, and are eligible to apply in the following month. If their income is over the limit, these applicants can take advantage of a pooled income trust (鈥淧IT鈥�), which can shelter the excess. The PIT is a type of supplemental needs trust administered by an organization with an underlying charitable cause. With a PIT, the Medicaid recipient can keep their income level below the required threshold and keep the excess in trust. Once there, the income can be made available to the recipient to pay expenses for their own benefit, such as rent, utilities, food and clothing.

Medicaid Planning is Key

Though the state has not yet imposed a lookback period for Community Medicaid applicants, New Yorkers interested in the program should take precautions to protect their assets ahead of time. Consulting with an experienced attorney, especially while you are healthy, can minimize exposure of your assets and ensure that your enrollment in the program is seamless.

By Frank Oswald, Esq.

Frank Oswald, Esq. is an associate attorney at 明星黑料, P.C. focusing his practice areas on Trusts and Estates. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.

How Deeds and Medicaid Can Intersect

When applying for nursing home Medicaid, the state reviews all financial transactions made within the five years (60 months) prior to the application. This is known as the 鈥�look-back period.鈥� If you transferred assets for less than fair market value during that time, Medicaid treats the transfer as a gift.

Adding your son to your deed without receiving full market value in return is typically considered a partial gift of your home. If the transfer occurred within five years of applying, Medicaid may impose a penalty period during which it will not pay for your nursing home care. The length of the penalty is calculated by dividing the value of the gifted portion by the state鈥檚 average monthly nursing home cost. Importantly, the penalty period does not begin until you are otherwise eligible for Medicaid and residing in a nursing home.

There are limited exceptions to the five-year rule, which include but are not limited to transfers to a spouse, a disabled child, or a 鈥渃aretaker child鈥� who lived in the home for at least two years and provided care that delayed nursing home placement. These exceptions are narrowly defined and require documentation.

Other Potential Issues Beyond Medicaid

Beyond Medicaid concerns, adding a child to a deed may expose the home to that child鈥檚 creditors, divorce proceedings, or financial difficulties, and you may lose full control over the property. Additionally, there are certain tax implications when transferring property that can negatively affect you or your child. Lastly, the way your property is titled鈥攚hether as tenants in common or joint tenants with rights of survivorship鈥攃an lead to unintended consequences, potentially undermining your estate planning objectives or leaving some or all of the property subject to Medicaid estate recovery claims.

Speaking With an Estate Planning Lawyer Can Help You Implement the Right Strategy

While no one can predict future health needs, planning ahead is critical. Strategies such as a properly drafted Medicaid Asset Protection Trust, created at least five years before care is needed, may protect your home without exposing it to the risks associated with co-ownership. Consulting a Medicaid-conscious estate planning attorney is the best way to safeguard your assets and avoid future complications.

Who Qualifies For Community Medicaid in NY?

To be eligible for Community Medicaid, an individual must meet certain income and asset limits. Starting September 1, 2025, the applicant must show that they require physical assistance with 3 or more ADLs. The exception to the rule being that if there is a diagnosis of dementia or Alzheimer鈥檚 disease, the applicant need only show the need for supervisory assistance with 2 or more ADLs.

If the minimum needs criteria is met, personal care services can be provided through a licensed homecare agency or, in the case of a friend or family member, through the Consumer Directed Personal Assistance Program (鈥淐DPAP鈥�). This program allows those who need a caregiver to recruit and hire someone of their choice to assist them with daily needs.

Caregiver vs. Home Health Aide: Why Choose One Over the Other?

It can be difficult for the elderly or disabled to come to terms with needing help, and it can be even harder for them to trust strangers to care for them in the home they may have maintained for decades on their own. CDPAP allows a familiar face to provide the necessary services. Beyond having a familiar face, a CDPAP caregiver is allowed to assist with certain tasks for which a licensed home health aide cannot. These include the ability to administer medications, inject insulin shots, perform wound care, administer nutrients through a feeding tube, make medical assessments, or open mail. The CDPAP caregiver is not limited by a license.

Who Can Be a Paid Caregiver?

Most family members can serve as paid caregivers, but there are some exceptions. Spouses and parents of children under 21 may not serve as personal caregivers. You do not have to be a family member to be a paid caregiver, it can be any person including, but not limited to, siblings, friends, prior home health aides, or neighbors can also qualify.

What is the Pay Rate for CDPAP in NY?

CDPAP determines the hours of care a recipient may receive based on a Medicaid assessment evaluating medical needs. Caregivers are paid on the books directly from a Medicaid fiscal intermediary. Wages are on an hourly basis and the hourly rate usually ranges from $15 to $25 per hour depending on various factors.

This program is great for those who wish to care for elderly parents or disabled family members without having to sacrifice income which they need to support their own immediate family. An attorney familiar with planning for the elderly and disabled can help you navigate Medicaid applications and determine which programs are available to you.

By Britt Burner, Esq. and Erin Cullen, Esq.

Britt Burner, Esq. is a Managing Partner, and Erin Cullen, Esq. is an Associate Attorney at 明星黑料, P.C. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan, and East Hampton.

Life Estate Deeds and Medicaid

Life estate deeds are sometimes used in Medicaid planning because Medicaid cannot put a lien on the house for the cost of services rendered and cannot recover after death because it avoids probate. Note that for Medicaid coverage in a nursing home, this full protection is only available five years after the life estate deed is signed.

What are the Disadvantages Of a Life Estate Deed?

You may ask, is there a downside? For one, the transfer of ownership in a life estate deed is irrevocable. Once a deed is signed, the life estate and remainder interests are binding. To remove or modify a life estate, the remaindermen would have to give back their interest.

Another potential downside is that a life tenant cannot unilaterally sell, mortgage, or transfer the property. If the life tenant or remainderman wants to sell, they must agree. The distribution of sale profits to which the life tenant is entitled is determined by the life tenant’s age and the current market value of the property, using actuarial tables or formulas provided by the IRS.聽Interestingly, life tenants can transfer their interest to someone else during their life, but the new life tenant is limited to the lifespan of the original life tenant.

Life Estate Deed vs. Trust: Which is Better?

It is often advisable to place the entire property in a trust instead of merely using a life estate deed. Using a trust can allow you to change the beneficiaries and even change who is the trustee of the trust.聽 On the Medicaid front, putting the property in an irrevocable trust will give complete protection to the property in the event it is sold during your lifetime because the entirety of the proceeds will remain protected in the trust rather than paying out to the life tenant in their individual name.

While a life estate deed is one of the tools in the estate planner鈥檚 belt, it is not the answer for everyone. As with any planning, the best option will depend on the goals, concerns and people involved. An attorney versed in estate planning can help you decide if a life estate deed is the right addition to your estate plan.

By Britt Burner, Esq. and Erin Cullen, Esq.

Britt Burner, Esq. is a Managing Partner, and Erin Cullen, Esq. is an Associate Attorney at 明星黑料, P.C. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan, and East Hampton.

How Does a Medicaid Asset Protection Trust Work?

The MAPT is an irrevocable trust, meaning that it cannot be revoked unless the creator of the trust, Joan, and the beneficiaries agree. Joan鈥檚 children can be the trustees, but Joan can retain the right to remove them from this position as well as the right to change the ultimate beneficiaries of the trust. During her life, Joan can also keep the exclusive right to occupy the premises and will be responsible for the property鈥檚 maintenance, upkeep and taxes, thus not placing any additional burden upon her children.

Fast forward five years and Joan gets the grandkids she has been hoping for and her daughter asks her to move closer to help out. Joan loves the idea, but what about her house?

The trustees can sell the house in the name of the MAPT. Joan鈥檚 children, as trustees, will be responsible to handle the sale including signing the listing agreement, contract of sale, and closing documents. Just as if Joan had kept the house in her own name, a $250,000 exclusion from capital gains tax will apply.

The proceeds of the sale must be deposited in a bank account in the name of the trust; the trust sold the house, therefore the trust gets the proceeds. From there, the trust can purchase a new house to serve as Joan鈥檚 primary residence with the same rules as the prior residence. The protection for Medicaid purposes goes back to when Joan initially put her first house into the trust, so no new clock is set since the assets never left the trust.

If Joan decides to move in with her daughter, the assets can be left in cash or invested within the trust. Depending on how the trust is written, Joan can receive the income generated by those assets. However, in no case may Joan have access to principal from trust assets.

Closing Considerations

When speaking with the elder law attorney, Joan should be upfront about the potential for a move so her concerns can be addressed. It may make sense, if Joan knows what state she

is likely to end up in, for an elder law attorney in the second state to review a draft of the trust to make sure maximum protection can be provided whether Joan ends up needing services from Medicaid in that state.

By Britt Burner, Esq.

Britt Burner, Esq. is a Partner at 明星黑料, P.C. focusing her practice areas on Estate Planning and Elder Law. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.

What Determines Eligibility for Medicaid Long-Term Care?

Applicants are permitted to have countable assets in the amount of $32,396, retirement assets in any amount鈥攕o long as the retirement account is set up for a monthly distribution鈥攁nd a pre-paid irrevocable burial.

Applying for Medicaid also involves a five-year lookback. This requires the applicant and spouse to provide full financial disclosure for the five-year period immediately prior to institutionalization. The purpose of the lookback is to see if the applicant or spouse transferred any assets out of their names. If transfers were made, there will be a legal presumption that this was done for the purpose of applying for Medicaid, and a penalty will be assessed. The penalty will result in a time of ineligibility for services.

However, there are certain transfers that are exempt and will not draw a penalty, this includes transfers of any assets to a spouse or to a blind or disabled child. Specifically for the primary residence, transfers are exempt when made to a spouse, blind or disabled child of the applicant, a sibling with an equity interest in the home, or to a caretaker child.

What is a Caretaker Child?

A caretaker child is defined as a child who has resided in the primary residence with the Medicaid applicant for the two years immediately prior to institutionalization and who, during that time has provided some level of care support to the individual who requires nursing home care. Medicaid will closely scrutinize the transfer and ask for supporting documentation to prove residency for the caretaker child.

What Assets Are Counted for Medicaid?

Countable assets can include bank accounts, cash value of life insurance, brokerage accounts, and non-qualified annuities, to name a few. Importantly, qualified funds such as a Traditional IRA, 403(b), and other tax deferred monies are not considered as long as they are in 鈥減ayout status.鈥� For those with countable assets above the limit, New York does not currently impose a lookback period for the homecare program. This means that an applicant can transfer excess assets to a family member, friend, or Medicaid Asset Protection Trust and be eligible to apply in the following month.

With income including, but not limited to, social security payments, pension, and distributions from a tax deferred retirement account, many adults in need will have excess income that is enough to cover their day-to-day expenses but not sufficient to pay for care needs.

How a Pooled Income Trust for Medicaid Can Help

Good news鈥攅ven with income that is over the limit, a pooled income trust (鈥淧IT鈥�) can be used to shelter the excess. A PIT is a type of supplemental needs trust that is administered by an organization with an underlying charitable cause. The excess is moved into the PIT each month and then made available to the Medicaid recipient to pay expenses for their own benefit such as rent, mortgage, utilities, food, clothing, etc. Any unused funds will accumulate in the trust from month to month and can be used into the future until the time of death.

Planning Ahead for New York Medicaid Eligibility

Even though there is currently no lookback imposed in New York for Community Medicaid applicants, advance planning is advisable. Protection of the home and other assets should be top of mind for those that may be seeking this type of care now or in the future.

How is CDPAP Changing in 2025?

The change that is taking place has to do with the CDPAP administrative systems by which someone accesses their care and through which the caregiver is paid. Under this program, a caregiver is paid and receives benefits through a Fiscal Intermediary (鈥淔I鈥�) that has a contract with the state to do so. Starting in March 2025, New York State will be condensing down to one FI from the over 600 FIs that currently operate in this arena. According to lawmakers, this drastic change will save the state $500 million in the Medicaid budget, critics are skeptical of this projection.

For those who are already enrolled in CDPAP with an FI, a letter should have been sent by their current FI telling them that they need to re-enroll themselves and their caregivers. The single FI is Public Partnerships LLC (鈥淧PL鈥�). To take on this enormous job, PPL has 31 approved facilitators. These facilitators are existing organizations, including FIs, that will be deputized by PPL to serve program participants and assist with the transition.

How Long Do I Have to Re-Enroll in CDPAP?

Current enrollees have until March 28, 2025 to transition over. Advocates encourage early enrollment because hotline wait times and delays have been significant as the program currently serves over 240,000 New York State residents receiving care and has over 400,000 caregivers, all of whom must make the switch. PPL has provided online and telephone options for users to initiate the transition. For Medicaid recipients that are new to enrollment in CDPAP, PPL will be the only FI option starting March 1, 2025.

If you are a Community Medicaid recipient that is currently enrolled in the CDPAP program, you should be contacted by your existing FI to guide you in the transition process. If you have not received this communication, please be proactive and make an inquiry to ensure your care continues without interruption.

By Britt Burner, Esq.

Britt Burner, Esq. is a Partner at 明星黑料, P.C. focusing her practice areas on Estate Planning and Elder Law. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.

5-Year Look-Back Window for Nursing Home Medicaid

The current look-back is 60 months (5 years) for nursing home Medicaid. This means that you will be penalized for transfers made by you or your spouse during the five years preceding an application by either one of you for nursing home Medicaid. The penalty is based on a legal presumption that the assets were given away to qualify you for the program. However, depending on the facts and circumstances surrounding the transfer, a penalty may be avoided in some cases.

Understanding Medicaid Penalties

On Long Island, a one-month penalty will be assessed for every $14,668 that you transfer within the look-back. For example, if $75,000 is transferred during the 5 years preceding an application for institutional Medicaid, there would be a 5.11-month penalty assessed. This is the amount of time for which there would be no coverage from Medicaid and the patient would need to privately pay for the facility.

Whether or not planning was done in advance, there are tools that can be used to preserve some assets. While we do not currently have a look-back for community Medicaid, it may be on the horizon, so the look-back should be considered in any estate planning with a view towards long term care.

By Britt Burner, Esq.聽

Britt Burner, Esq. is a Partner at 明星黑料, P.C. focusing her practice areas on Estate Planning and Elder Law. 明星黑料, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.