If you are a New Yorker over the age of 65, there is a looming question that will define your financial future: “How will I pay for long-term care?”
Many believe the answer is “Medicare.” As a New York elder law attorney with over 30 years of experience, I must be blunt: Medicare does NOT pay for long-term care. Medicare pays for doctors and hospitals. It pays $0 for the home health aide you need to help you dress, or the nursing home stay that lasts for years. In New York City, this care costs between $18,000 and $24,000 per month.
The only government program that pays these bills is Medicaid. But who should apply? Is it only for the destitute? Absolutely not. In 2026, with the full implementation of the 30-month look-back period and stricter physical requirements, Medicaid planning is the primary tool for middle-class and upper-middle-class New Yorkers to preserve their legacy.
I am Russel Morgan, and at Morgan Legal Group, we have helped over 1,000 families successfully navigate the Medicaid maze. We help people who have homes, savings, and dignity qualify for the care they earned without losing everything. This comprehensive 2026 guide will explain who should apply, the new harsh rules you face, and the legal strategies (like Trusts and Spousal Refusal) that make qualification possible.
Who Should Apply for Medicaid in 2026? (The 3 Profiles)
There are three distinct groups of New Yorkers who need to apply for Medicaid. Understanding which group you fall into determines your strategy.
Profile 1: The “Crisis” Applicant (Immediate Need)
This is someone who has suffered a sudden medical event (stroke, fall, dementia diagnosis) and needs care *now*.
- The Problem: They have assets (a home, an IRA) that disqualify them. They are facing a $20,000/month bill immediately.
- The 2026 Danger: If they need home care, they are now subject to the new 30-month look-back. Any assets they transfer *now* will create a penalty period where Medicaid refuses to pay.
- The Strategy: We use emergency tools like “Spousal Refusal” or “Gift-and-Note” planning to save roughly 40-50% of the assets.
Profile 2: The “Proactive” Planner (The 5-Year Outlook)
This is the ideal candidate. You are healthy (or managing well), but you are 65+ and own a home. You know you will need care eventually.
- The Problem: You are “house rich but cash poor.” You want to leave your home to your kids, not the nursing home.
- The Strategy: We create a Medicaid Asset Protection Trust (MAPT). You transfer the home into it. You start the 5-year look-back clock. In 5 years, you are 100% protected.
Profile 3: The “Community” Applicant (Aging in Place)
This is the most common New Yorker. You want to stay in your apartment or home, but you need a home health aide.
- The Problem: You have “surplus income.” Your Social Security and pension exceed the strict Medicaid limit ($1,732/mo in 2025/26).
- The Strategy: We use a Pooled Income Trust to protect your income while Medicaid pays for your aide.
The Two Types of Medicaid: Know the Difference
New York has two distinct Medicaid programs for seniors. The rules for 2026 are different for each.
1. Community Medicaid (Home Care)
This covers home health aides, adult day care, and private duty nursing.
The 2026 Change: For decades, there was no look-back for this. As of 2025/2026, New York is enforcing a 30-month (2.5 year) look-back. This means you can no longer just “transfer assets on Monday and apply on Tuesday.” You must plan ahead.
2. Institutional Medicaid (Nursing Home)
This covers room and board in a skilled nursing facility.
The Rule: There is a strict 60-month (5-year) look-back. Medicaid will audit your finances for the last 5 years. Any gifts (even to charity or grandkids) will result in a penalty period where you must pay out of pocket.
The 2026 Financial Eligibility Rules (The Hurdles)
To qualify, you must meet strict financial tests. These numbers change annually (usually in January). Based on 2025 trends, here is what 2026 applicants face.
The Asset Test (How Much Can You Keep?)
Medicaid allows you to keep a very small amount of “countable” resources.
- Individual: Approx. $31,175
- Couple (Both applying): Approx. $42,312
What is Exempt? You generally do *not* have to count:
- Your primary residence (up to ~$1M equity) *if* you or your spouse live there. (But see “Estate Recovery” below).
- One automobile.
- Retirement accounts (IRAs/401ks) *if* they are in “payout status” (taking RMDs).
- Pre-paid burial plots.
The Income Test (How Much Can You Earn?)
This is the hardest hurdle for many.
- Individual: Approx. $1,732 / month
- Couple: Approx. $2,351 / month
Most New Yorkers fail this test. If you worked for the city or have a union pension, you make more than $1,732. Does that mean you can’t apply? NO. It just means you need a Pooled Income Trust (discussed below).
The New “Physical” Hurdle: The 3-ADL Rule
In addition to being financially poor, you must be physically “needy.” Starting late 2025/2026, New York has raised the bar.
The Old Rule: You needed help with one or two tasks.
The New Rule: You must prove you need limited assistance with at least THREE (3) Activities of Daily Living (ADLs) (e.g., bathing, dressing, toileting). If you have dementia, the requirement is TWO (2) ADLs.
This makes the medical assessment (the “NYIA” assessment) much harder. You need an attorney to help prepare your medical history to ensure you don’t get denied for “not being sick enough.”
How to Protect Your Assets and Still Qualify (The Morgan Legal Group Strategy)
This is the core of our practice. How do you qualify for Medicaid without losing your life savings? We use three primary tools.
Tool 1: The Medicaid Asset Protection Trust (MAPT)
This is the “Gold Standard.” It is an Irrevocable Trust.
- You transfer your home and savings into the trust.
- You retain the right to income from the assets and the right to live in the home.
- You cannot access the principal (the house value).
- After the look-back period (30 months for home care, 5 years for nursing home), the assets are invisible to Medicaid.
Why it works: You get the care you need, and your children inherit the house intact, avoiding probate and Medicaid liens.
Tool 2: Spousal Refusal (The “White Knight” Strategy)
What if one spouse is sick and the other is healthy and wealthy?
The Rule: Under federal law, a “community spouse” is allowed to keep about $154,000 (CSRA).
The NY Strategy: In New York, the healthy spouse can sign a document “refusing” to support the sick spouse. Medicaid *must* then enroll the sick spouse (if they are otherwise eligible). Medicaid *can* sue the healthy spouse later, but we can often negotiate this down or settle it for pennies on the dollar. This saves the healthy spouse from impoverishment.
Tool 3: The Pooled Income Trust (Saving Your Income)
If you have “surplus income” (e.g., you make $3,000 but the limit is $1,732), you do not have to give it to Medicaid.
You deposit the surplus ($1,268) into a Pooled Income Trust managed by a non-profit. The trust then uses that money to pay your *bills* (rent, mortgage, food, electric).
Result: You get Medicaid, and you keep the benefit of your full income.
The “Home” Trap: Estate Recovery
Some people say, “I don’t need a trust; my house is exempt.”
The Trap: Yes, you can *get* Medicaid while owning a home. But when you die, Medicaid is a “preferred creditor.” They will file a lien against your estate for every dollar they spent. If they paid $200,000 for your care, your kids will have to sell the house to pay them back.
The Solution: A MAPT puts the house *out* of your name so it is not part of your probate estate. Medicaid cannot touch it.
Why You Need a 30-Year Expert, Not a Social Worker
Applying for Medicaid in New York is an adversarial legal process. The caseworkers are trained to find reasons to deny you or impose penalties.
- They will scrutinize every bank withdrawal over $2,000.
- They will question every check written to a grandchild.
- They will look for errors in your Trust.
At Morgan Legal Group, we handle the entire application. We gather the 5 years of records. We explain the “weird” transactions. We draft the Spousal Refusal. We fight the denials at Fair Hearings.
Conclusion: The Time to Plan is Before the Crisis
In 2026, Medicaid is not just a safety net; it is a complex financial system that requires a strategic entry plan. With the 30-month look-back now a reality, “waiting until you get sick” is a strategy that leads to bankruptcy.
Do not leave your care or your legacy to chance. Schedule a consultation with Morgan Legal Group today. We serve clients across all five boroughs of New York City and Long Island. Let us build the plan that protects your future.
For official 2025/2026 income and resource levels, you can check the NY Department of Health Medicaid Levels.
