When one spouse needs nursing home care or significant home care in New York, the financial impact on the other spouse can be devastating. Without proper planning, the healthy spouse can face significant financial hardship. This guide is for married couples in New York concerned about protecting assets and income when one spouse needs long-term care. Medicaid planning for married couples in New York is built around a set of federal and state rules designed to prevent exactly that outcome. This guide walks through how those rules work, what married couples need to know about income and asset limits, and why working with an experienced attorney can make a meaningful difference in protecting the community spouse.

Key Takeaways

New York Medicaid has special spousal impoverishment rules designed to protect the community spouse when the other spouse needs nursing home or long-term home care. These protections allow the healthy spouse to keep a defined share of assets and income rather than spending everything down before Medicaid coverage begins.

• Medicaid eligibility for married couples looks at both spouses' income and assets, and New York applies a strict income standard to the spouse seeking long-term care Medicaid while still allowing the community spouse to retain a substantial share of the couple's countable assets through the Community Spouse Resource Allowance (CSRA) and a protected monthly income amount through the Minimum Monthly Maintenance Needs Allowance (MMMNA).

• For 2026, New York uses specific income and asset limits that adjust annually. The CSRA can reach up to $162,660, and the MMMNA is $4,066.50 per month. Rules and figures change each year, and this article provides general education rather than individualized legal advice.

• Planning is crucial for Medicaid in New York due to complex rules and potential penalties for non-compliance, including a 60-month look-back period for asset transfers that can delay eligibility.

• Early Medicaid planning can help protect the home and other assets within the law, but even "crisis" planning may be possible if a spouse is already in, or about to enter, a nursing home.

If you are a married couple in Orange County, New York, and want to understand how these rules apply to your specific situation, call or text Keith Pedrani at (201) 466-2641 or contact Pedrani Law LLC online to schedule a consultation.

How Medicaid Planning Protects the Community Spouse in New York

Here is the scenario that brings most couples through the door: one spouse-the institutionalized spouse-needs nursing home care or significant home and community based services. The other spouse, the community spouse, still lives at home and depends on shared savings and income to pay the mortgage, buy groceries, and cover everyday living expenses.

Medicaid planning is about arranging income and assets so that the spouse who needs long-term care can become Medicaid eligible while the community spouse is not left destitute. New York Medicaid planning protects the community spouse from becoming impoverished by ensuring they can retain enough resources and monthly income to maintain a reasonable standard of living.

These protections are rooted in federal law-specifically Section 1924 of the Social Security Act-and are implemented through New York State statutes and regulations, including Social Services Law § 366 and § 366-c. Together, they create what are commonly referred to as spousal impoverishment protections.

Thoughtful planning is especially important for couples in Orange County communities such as Goshen, Warwick, Middletown, and Newburgh, where nursing home costs can quickly deplete a lifetime of savings. Nursing facilities in the region can cost well over $10,000 per month for private-pay residents, making Medicaid planning far more than a theoretical exercise.

Married couples can schedule a consultation with Pedrani Law LLC by calling or texting (201) 466-2641 to review how the rules apply to their finances.

Key Medicaid Terms for Married Couples: Community Spouse, Institutionalized Spouse, and More

Before making big decisions about long-term care and finances, it helps to understand the vocabulary that Medicaid uses. Here are the terms that come up most often.

• The community spouse is the spouse who remains at home (or in an assisted living setting) and does not need Medicaid long-term care services. This spouse is entitled to keep certain resources and a portion of monthly income under New York's spousal impoverishment rules.

• The institutionalized spouse is the spouse applying for long-term care Medicaid-whether in a nursing home or receiving care through certain New York home and community based services (HCBS) or Managed Long-Term Care (MLTC) programs for at least 30 consecutive days.

• Countable assets are resources that Medicaid looks at for eligibility. These include bank accounts, investments, CDs, and most non-retirement liquid savings. Some assets are non-countable or exempt, like certain burial funds and limited equity in the primary residence.

• Medicaid applicants are subject to both income and asset limits. Those limits differ for a single applicant, a married applicant whose spouse also applies, and the non-applicant spouse living at home.

Getting these definitions right is the first step toward understanding how much the community spouse can protect.

Medicaid Eligibility for Married Couples in New York: Income and Asset Limits

Medicaid planning for married couples in New York includes specific eligibility rules that differ significantly from those for individual applicants or from "regular" community Medicaid for general health coverage. Income and asset limits apply differently depending on the program, and they change over time-always verify current numbers with the New York State Department of Health or a qualified attorney.

When only one spouse applies for nursing home Medicaid, New York reviews the married couple's combined finances at the time of the application, but the applicant still must satisfy Medicaid's income limit and resource rules. The institutionalized spouse must stay under a low individual asset limit, while the community spouse is allowed to keep assets up to the Community Spouse Resource Allowance.

On the income side, Medicaid uses a strict income test for the institutionalized spouse, even though allowances may shift some income to the community spouse. The institutionalized spouse usually contributes most monthly income toward nursing home care costs after certain deductions, while the community spouse may receive income up to the minimum monthly maintenance needs allowance. If the non-applicant spouse's income already exceeds this allowance, no additional allocation is made-and in some cases, the community spouse may need to contribute a portion of excess income toward the other spouse's care.

It is important to understand that income and asset limits for nursing home Medicaid and long-term care programs are not the same as limits for Medicaid under the Affordable Care Act or standard health coverage programs for pregnant women, children, or working adults. Married couples should not assume the rules are identical across programs.

Community Spouse Resource Allowance (CSRA): How Much Can the Community Spouse Keep?

The CSRA is the amount of countable assets the community spouse is allowed to retain when the other spouse qualifies for long-term care Medicaid. It is one of the most important numbers in any Medicaid plan for a married couple.

New York calculates the CSRA as the greater of:

• A fixed minimum amount, or

• One-half of the couple's combined countable assets at the time the institutionalized spouse begins their continuous period of care

This figure is subject to a state-set maximum that adjusts annually. In 2026, the CSRA ranges from $32,532 to $162,660 depending on the state. New York's minimum is $74,820, and its maximum aligns with the federal cap of $162,660 for that year. The federal maximum CSRA for 2026 is $154,140, though New York's applicable cap may differ based on how the state implements federal guidelines. CSRA protects a portion of a couple's assets for the community spouse, and Medicaid allows the community spouse to retain significant assets through this mechanism.

Countable assets for CSRA purposes typically include checking and savings accounts, CDs, taxable brokerage accounts, cash value in some life-insurance policies, and other liquid assets. Non-countable assets-like a properly structured burial fund, one vehicle, household furnishings, and limited equity in the primary residence-are excluded from the calculation.

If the couple's assets exceed the CSRA plus the institutionalized spouse's allowable limit, they may need a structured spend-down or other strategies to meet eligibility. Options can include paying off medical bills or debts, making home repairs or modifications, purchasing exempt assets, or in some cases using a Medicaid compliant annuity. Each option has specific requirements under New York Medicaid rules.

Example: Consider a married couple living in Goshen, Orange County with $300,000 in countable assets (after excluding their home, car, and burial funds). One-half of $300,000 is $150,000-below the $162,660 maximum, so the community spouse resource allowance would be approximately $150,000. The community spouse could keep that amount without being forced to spend it down. The remaining assets held by the institutionalized spouse would need to be reduced through compliant strategies before or during the Medicaid application process.

Minimum Monthly Maintenance Needs Allowance (MMMNA): Protecting Community Spouse Income

The MMMNA is the minimum income level that New York allows the community spouse to have each month to cover basic living expenses such as housing, utilities, and food. The MMMNA ensures community spouses have enough monthly income to avoid financial hardship while the other spouse receives Medicaid coverage.

If the community spouse's own income-including Social Security, pensions, or her own income from any source-falls below the current MMMNA, some of the institutionalized spouse's income can be allocated to the community spouse to bring her total up to the allowable limit. The community spouse can legally divert income from the institutionalized spouse to meet income standards through this allocation.

In New York, the MMMNA is $4,066.50 for 2026. The MMMNA varies by state and financial situation, and for 2026 it ranges from $2,705 to $4,066.50 nationally. The MMMNA is adjusted annually based on federal guidelines, typically tracking the consumer price index.

The institutionalized spouse is usually permitted to retain only a small personal needs allowance-often just $50 per month-plus deductions for Medicare premiums and other health insurance costs. After those deductions, the remaining income must go toward nursing home care costs.

There is also a family member monthly allowance of $902 per month in 2026 for each dependent family member (such as a minor child or dependent parent) living with the community spouse and receiving no income of their own.

Example: Suppose a community spouse living in Middletown has Social Security and pension income totaling $2,500 per month. The MMMNA is $4,066.50. The institutionalized spouse's Social Security and pension can be partially redirected-up to $1,566.50 per month-to help the community spouse cover mortgage payments, utilities, and everyday living expenses. The institutionalized spouse retains $50 for personal needs, and the balance goes toward the nursing facility.

Countable Assets vs. Exempt Assets: What Really Counts for New York Medicaid?

One of the most important steps in Medicaid planning is sorting the couple's resources into countable and non-countable categories. Misclassifying an asset can lead to denial or delay of Medicaid eligibility, and proper documentation is critical-especially during the five-year look-back review.

Common countable assets include:

• Non-retirement bank accounts (checking, savings, money market)

• CDs and taxable brokerage accounts

• Non-exempt life insurance cash values

• Second vehicles beyond what New York allows

• Non-residence real estate (vacation homes, rental properties)

• Certain business interests

Common exempt assets under New York rules include:

• The primary residence (the primary residence is exempt from Medicaid asset limits, and home equity is generally exempt from Medicaid asset limits for the community spouse when they continue to reside there, subject to equity limits)

• One vehicle

• Household furnishings and personal effects, which are generally exempt

• Properly structured burial funds and certain prepaid funeral contracts

• Some retirement accounts in payout status, though treatment of retirement funds is complex and fact-specific

Exempt assets include the primary residence, one vehicle, and certain burial funds. The primary residence is generally an exempt resource for Medicaid eligibility in New York, but the home equity limit must be considered. Home modifications-such as wheelchair ramps, bathroom accessibility upgrades, or roof repairs-can reduce countable assets for Medicaid eligibility purposes by converting cash into improvements to an exempt asset.

Couples should not assume that simply retitling an account or making a quick transfer automatically removes an asset from the countable category. New York Medicaid can still treat such assets as available to the applicant spouse's resources during the look-back review.

Spousal Impoverishment Protections in New York: Income and Asset Rules Working Together

The CSRA, MMMNA, and related rules work together as a unified framework of spousal impoverishment protections. Spousal Impoverishment Protection was introduced in 1988 under federal law specifically to prevent the community spouse from falling below an allowable limit of income and assets when the other spouse enters long-term care. Spousal Impoverishment Protection prevents financial destitution of the community spouse.

These spousal protections apply to both traditional nursing home Medicaid and, under federal and New York law, to certain home and community based services (HCBS waiver and MLTC) when the applicant meets program criteria. Federal law-including provisions aligned with Section 2404 of the Affordable Care Act-currently extends spousal impoverishment protections for HCBS programs through specific dates, though Congress and the state periodically revisit and update these protections.

While these spousal impoverishment rules offer significant protection, they do not shelter unlimited resources. The couple may still face spend-down requirements, premium contributions, or estate recovery under certain conditions. A Medicaid planning professional can help a married couple understand which protections apply and when it may be advantageous to elect certain budgeting options allowed under New York policy.

Special New York Planning Tools: Spousal Refusal, Pooled Trusts, and Budgeting Choices

New York offers some unique planning options for married couples that may not exist in other states.

Spousal refusal is one of them. New York recognizes the legal doctrine of spousal refusal in Medicaid planning. Under Social Services Law § 366(3)(a), the community spouse-the non-applicant spouse-can formally refuse to make their income and resources available to the institutionalized spouse. This may allow the applicant to qualify for Medicaid based on their own assets alone and still receive coverage as a medicaid beneficiary, while the state may later seek reimbursement from the refusing spouse. However, spousal refusal comes with an important trade-off: the state retains the right to pursue the refusing spouse for reimbursement of Medicaid expenditures. This tool should only be used after careful legal analysis.

In some MLTC or community based waiver program cases, a married applicant may also choose to be budgeted as a single individual and use a pooled income trust-sometimes called a surplus income program trust-for excess income rather than using spousal impoverishment budgeting, when that choice produces a more favorable result. New York policy on these choices has shifted over time; earlier directives required spousal impoverishment budgeting even when it was less favorable, but those restrictions were later rescinded to restore flexibility to married Medicaid applicants.

These strategies are technical and should be implemented only with guidance from an experienced New York elder law attorney who understands current GIS directives, the Medicaid Reference Guide, and local county practices.

Planning for the Home, Retirement Accounts, and Other Major Assets

For many Orange County couples, the home and retirement accounts represent their largest assets and require careful planning under Medicaid eligibility and estate recovery rules.

When there is a community spouse living in the primary residence, New York generally treats a certain amount of home equity as exempt. Home equity limits range from $752,000 to $1,130,000 in 2026, with New York using the higher limit. If the community spouse, a minor child, or a disabled child lives in the home, the equity cap may not apply at all. A primary residence can typically be protected from Medicaid estate recovery if specific conditions are met-such as a surviving spouse still residing there-but estate recovery can still become an issue after both spouses have passed or the home is sold.

Retirement accounts (IRAs, 401(k)s, 403(b)s) may be treated differently depending on whether they are in payout status, the type of account, and how New York's Medicaid rules classify required minimum distributions. Distributions from retirement accounts are generally counted as income. The account balance itself may or may not count as a resource depending on accessibility and payout status-this area is highly fact-specific.

Couples may also consider options like:

• Pre-need burial arrangements

• Paying down mortgage debt or other liabilities

• Making necessary home modifications

• Converting countable resources into exempt assets

It is important to coordinate Medicaid planning with broader estate planning tools. Revocable living trusts, while useful for probate avoidance and incapacity planning, do not themselves shield assets from Medicaid because the grantor retains control. Where appropriate, irrevocable trusts can protect assets from Medicaid eligibility assessments, but these require careful design, sufficient lead time, and individualized legal advice.

Timing Matters: Look-Back Rules, Gifts, and Crisis vs. Pre-Crisis Planning

Medicaid in New York has a 60-month look-back period for uncompensated asset transfers when applying for nursing home Medicaid, and for married couples seeking coverage for nursing facility care, gifts and below-fair-market-value transfers can create penalty periods that affect nursing home residents who need ongoing long-term care. The penalty is calculated by dividing the total uncompensated value by the average regional nursing home cost.

For certain home and community based services, New York has been phasing in a 30-month look-back period for transfers made on or after October 1, 2020. The applicable look-back depends on the program and timing.

Married couples must be cautious about transferring the home, gifting to children, or moving assets between spouses without first understanding how those moves will be viewed within the look-back window. However, interspousal transfers of assets do not trigger Medicaid penalties in New York-transfers between spouses are generally treated differently from gifts to third parties.

Pre-crisis planning (5+ years before likely need) allows the full use of tools like irrevocable Medicaid Asset Protection Trusts (MAPTs), which can protect assets from counting against Medicaid eligibility once the look-back period has passed. Irrevocable trusts can protect assets from Medicaid eligibility assessments when properly structured and funded well in advance. Gradual, planned asset transfers can also be completed outside the look-back window.

Crisis planning (when nursing home care is imminent or already underway) relies on more immediate tools: maximizing the CSRA and MMMNA, spousal refusal where appropriate, Medicaid compliant annuity strategies, rapid spend-down of excess assets into exempt categories, and thorough documentation.

Even if one spouse is already in a facility in Orange County, consulting with a Medicaid planning attorney quickly may still significantly protect the community spouse's income and assets.

Coordinating Medicaid Planning with Your Broader Estate Plan

Medicaid planning should not be done in isolation. It should fit into a couple's larger estate and incapacity plan to avoid gaps, contradictions, or unintended consequences.

Revocable living trusts-which Keith Pedrani frequently uses for clients in nearby Bergen County, New Jersey-can work alongside New York Medicaid planning by helping avoid probate and organizing asset management, even though a revocable trust does not itself shield assets from Medicaid. Updated wills, powers of attorney, health care proxies, and living wills are equally important, particularly when naming agents to act if one spouse becomes incapacitated due to dementia, stroke, or other illness.

Beneficiary designations on life insurance, retirement accounts, and payable-on-death accounts should be reviewed in light of any Medicaid and long-term care strategy. Mismatched designations can cause accidental disinheritance, tax inefficiencies, or eligibility complications.

The best plans treat Medicaid planning, long-term care insurance (where available), and tax planning as interconnected pieces of a single strategy designed around the couple's specific financial and family circumstances-not as separate checkboxes.

Why Work with a Medicaid Planning Professional in Orange County, New York?

New York Medicaid rules are highly technical, frequently updated, and sometimes applied differently by various county offices. Professional guidance from an elder law attorney is recommended for navigating New York Medicaid rules-especially for married couples whose financial picture involves a home, retirement accounts, and multiple income sources.

A Medicaid planning professional can:

• Inventory the couple's income and assets comprehensively

• Project potential nursing home or home-care costs based on regional rates

• Design a legally compliant strategy tailored to the couple's goals and risk tolerance

• Help avoid common pitfalls such as improper gifts, incomplete documentation, missed deadlines, and misunderstandings about countable assets or allowable transfers

For Orange County residents-whether in Goshen, Monroe, New Windsor, Cornwall, or neighboring communities-working with a local practitioner familiar with regional nursing facilities and personal care services options provides practical, on-the-ground insight that a remote or generalist attorney may not offer.

Call or text Pedrani Law LLC at (201) 466-2641 or contact the firm online to schedule a personalized consultation.

About Pedrani Law LLC and Attorney Keith Pedrani

Pedrani Law LLC is a focused estate planning, elder law, and Medicaid planning practice serving clients in New York, New Jersey, and Connecticut, with a strong emphasis on families in Orange County, New York.

Founder Keith Pedrani holds both a J.D. and an M.B.A. from Syracuse University, graduated magna cum laude, and brings combined legal and business training to every client engagement. That background supports a practical, financially informed approach to long-term care planning, asset protection, and estate administration.

Keith is licensed in New York, New Jersey, and Connecticut, with a main office in Wyckoff, New Jersey, and an additional location in Goshen, New York-making him directly accessible to Orange County residents for in-person or virtual meetings. In addition to Medicaid planning for married couples, Keith assists clients with revocable trust estate planning, special needs planning, probate and estate administration, and broader wealth-transfer strategies.

While the firm cannot guarantee Medicaid eligibility or any specific legal outcome, it is committed to providing clear explanations, realistic expectations, and tailored strategies based on each couple's unique income and assets.

Next Steps: Talking with an Attorney About Your New York Medicaid Plan

The decisions married couples make about Medicaid, long-term care, and asset protection can affect housing, retirement security, and legacy for children and grandchildren. These decisions deserve more than guesswork.

Before your consultation, consider preparing:

• Current statements for all bank accounts, investment accounts, and retirement accounts

• A list of all income sources for both spouses (Social Security, pensions, rental income, etc.)

• Copies of existing wills, powers of attorney, and health care proxies

• A list of questions about nursing home or home-care options in Orange County

• Information about any recent or planned asset transfers or gifts

Both spouses-as well as adult children or trusted advisors, where appropriate-are encouraged to attend the consultation so everyone understands the plan and expectations.

Call or text Pedrani Law LLC at (201) 466-2641 or reach out online through the firm's website to schedule a confidential consultation about Medicaid planning for married couples in New York. Laws and figures referenced in this article can change, and only a personalized review with a qualified attorney can clarify how current rules apply to your situation.

Frequently Asked Questions About Medicaid Planning for Married Couples in New York

The questions below address common concerns that may not have been fully covered above. Answers are for general educational purposes-actual outcomes depend on individual circumstances and current law.

Can the community spouse keep the family home if the other spouse goes into a nursing home?

Under New York's spousal impoverishment and home-equity rules, the primary residence is often treated as an exempt asset for Medicaid eligibility purposes when the community spouse continues to live there. New York applies a home equity limit-up to $1,130,000 in 2026-but if a spouse, minor child, or disabled child lives in the home, the equity cap may be waived entirely.

While the home may be exempt for eligibility, it can still be subject to estate recovery after both spouses have passed or if the property is transferred. Couples concerned about keeping the home in Orange County-whether in Goshen, Warwick, or Cornwall-should speak with an attorney about both Medicaid eligibility rules and long-term estate planning goals to understand how the spouse's death or a future sale could affect recovery claims.

What happens if our couple's assets exceed the Community Spouse Resource Allowance?

If combined countable assets exceed the CSRA plus the institutionalized spouse's allowable limit, the couple may need a structured spend-down or other planning strategies to reduce excess assets before or during the Medicaid application process.

Lawful spend-down options may include paying off debt, addressing outstanding medical bills, making necessary home repairs, purchasing certain exempt resources like burial funds, or using a Medicaid compliant annuity depending on current rules and timing. Improper transfers or gifts can trigger a penalty period of ineligibility-especially if they occur within the look-back-so professional guidance is important before moving funds. When the couple's assets exceed the allowable limit, having an experienced attorney review options can make a substantial difference.

Do we need a revocable living trust for Medicaid planning in New York?

A revocable living trust is primarily an estate planning and probate-avoidance tool. Assets held in a revocable trust are generally still considered available for Medicaid eligibility because the grantor retains control over them. A revocable trust will not, by itself, shield assets from Medicaid.

That said, revocable trusts can be very valuable for organization, incapacity planning, and simplifying estate administration-particularly for clients who also have property or family ties in nearby Bergen County, New Jersey. When the goal is long-term Medicaid asset protection, clients may also consider irrevocable trust options such as Medicaid Asset Protection Trusts, but these must be funded well before any Medicaid application and require careful design and individualized legal advice.

How early should we start Medicaid planning as a married couple?

Ideally, planning should begin at least five years before either spouse is likely to need nursing home care, since the full 60-month look-back applies to nursing home Medicaid in New York. Starting early expands the range of lawful strategies and reduces the pressure of crisis decision-making.

However, many couples do not start that early and can still benefit substantially from planning when a need arises. Even healthy couples in their late 50s or 60s may want to discuss long-term care and Medicaid planning as part of a comprehensive retirement and estate planning review. The key is not to wait until a medical crisis forces rushed decisions.

Can children or other family members be involved in our Medicaid planning meetings?

Many married couples choose to involve adult children or other trusted family members in planning conversations. This is often helpful so that everyone understands the plan, expectations, and responsibilities-especially if those individuals may later serve as agents under powers of attorney, health care proxies, trustees, or executors.

The attorney will typically confirm who the actual clients are (usually the spouses) and obtain permission before sharing confidential information with others. Couples should discuss in advance which family members they want included and what role those family members might play going forward. Having a dependent family member or adult child present can also help with practical questions about caregiving, housing, and coordination with the broader family.