Many New Yorkers believe Medicaid is only for those with little to no money—but that’s one of the biggest misconceptions keeping families from getting the help they need. The truth is, Medicaid eligibility in New York depends on how your assets and income are structured, not just how much you have. With proper legal planning, most middle- and upper-middle-class families can qualify while protecting their home, savings, and retirement funds.
If you’ve ever wondered whether you “make too much” for Medicaid or heard conflicting advice online, this guide will clear up the confusion. We’ll break down the most common myths about qualifying for Medicaid in New York and share what families can do to prepare long before care is needed.
This post is for New York families and retirees who want to understand how Medicaid planning really works—and how to protect the family legacy with confidence.
Myth #1: “I have too much money or property to qualify for Medicaid.”
This is the most common misconception our firm hears. Families often assume Medicaid is only for those with very limited resources, when in reality, most people can qualify—it just requires planning ahead.
Here’s the truth:
Medicaid eligibility isn’t simply about your income or savings; it’s about how those assets are structured. With guidance from an experienced Medicaid planning attorney in New York, you can protect your property while maintaining eligibility for care.
Some of the most effective legal tools include:
- Medicaid Asset Protection Trust (MAPT): Moves your home or investments out of your name while still allowing you to live there.
- Pooled Income Trusts: Redirect excess income to maintain eligibility for home care.
- Community Spouse Protections: Allow a healthy spouse to keep a substantial portion of assets and income.
The key is timing. You don’t have to be broke to qualify for Medicaid—but you do need to plan before you need care.
Myth #2: “If I give away my house, I’m immediately eligible.”
This myth is one of the most damaging. Many people transfer property to children or relatives thinking it will secure eligibility. Unfortunately, this can do more harm than good.
The truth: Medicaid reviews all financial transfers made within the five years before you apply. This is known as the 60-month look-back period. Any gifts or transfers during that time can cause penalties or delays in coverage.
The right approach is to transfer assets through approved legal structures—such as a trust—well in advance. Giving away property at the last minute can create financial and legal complications that delay your access to care.
For example, a Medicaid Asset Protection Trust created more than five years before you need long-term care can safeguard your home while keeping you eligible. It’s one of the most strategic ways to protect your family’s future.
Myth #3: “Medicaid will take my house when I die.”
This is only partially true—and only if no planning has been done. Medicaid does not automatically seize your home, but it may place a lien on your house to recover costs from your estate after death.
The good news? Estate recovery can often be avoided with smart planning. If your home is placed into a properly structured trust or passes directly to your heirs outside of probate, it can remain protected.
Families who wait until it’s too late often face the emotional and financial stress of trying to “save the house” during crisis planning. Working with an elder law attorney before care begins ensures your home stays in your family’s name, not subject to state recovery.
Myth #4: “Medicare and Medicaid cover the same things.”
It’s easy to confuse these two programs, but they serve very different purposes:
- Medicare covers short-term medical care—doctor visits, hospital stays, and up to 100 days of rehab.
- Medicaid covers long-term care such as nursing homes, assisted living, and home health aides.
Relying solely on Medicare is one of the most expensive mistakes families make. Once Medicare stops paying, families are left paying out-of-pocket—unless Medicaid coverage is in place.
If you’re unsure how long-term care costs fit into your plan, review your current documents and coverage regularly. As discussed in our post “Maintaining Independence as You Age: Essential Planning for New Yorkers”, proactive planning allows you to stay in control of your care and assets.
Myth #5: “I can’t apply for Medicaid while receiving care.”
Even if you or a loved one is already in a nursing home, it’s not too late to apply. This is called crisis planning, and while options may be more limited, an attorney can still help preserve a significant portion of your assets.
Crisis strategies may include:
- Spousal transfers under community spouse rules
- Medicaid-compliant annuities
- Partial exemptions for certain property types
- Loan-gift back strategy
Don’t assume you’re out of options. Acting quickly with professional guidance can make a meaningful difference in what your family retains.
Myth #6: “I can fill out the Medicaid application myself.”
While it’s technically possible to apply on your own, even small mistakes can be costly. Missing one document or misunderstanding a single question can delay approval for months—sometimes resulting in thousands of dollars in uncovered care costs.
A professional Medicaid application typically includes:
- Verified five-year financial documentation
- Legal analysis of exempt and non-exempt assets
- Coordination with the local Department of Social Services
- Integration with existing estate and tax plans
DIY applications often end up costing families more in lost coverage than they save in attorney fees. Working with an experienced firm like The Village Law Firm ensures your plan is complete, compliant, and coordinated with your broader estate strategy.
The Real First Step Toward Medicaid Eligibility in New York
Before you make any transfers or apply for coverage, start with three key steps:
- Get a Comprehensive Financial Review
Collect financial statements, property deeds, mortgage records, proof of income, and insurance documents. An elder law attorney can quickly identify what’s countable versus exempt. - Create a Timeline
If care is needed soon, start immediate crisis planning. If you’re planning proactively, move assets into protective trusts at least five years in advance. - Develop a Written Medicaid Strategy
A good strategy coordinates:
- Asset protection trusts
- Pooled income or spousal transfer tools
- Updated powers of attorney and healthcare proxies
- Tax and estate documents working together
- Asset protection trusts
Planning early doesn’t just help you qualify—it helps you stay in control of how your assets are used to support your family’s future.
FAQs About Medicaid Eligibility in New York
1. How much money can you have and still qualify for Medicaid in New York?
Eligibility depends on several factors, including household size, income, and the type of care needed. As of 2025, individuals can generally retain modest savings and income, while married couples may keep more under community spouse rules.
2. What happens if I apply for Medicaid too late?
Late applications can result in months of unpaid care. However, crisis planning can still protect some assets if handled quickly by an attorney.
3. Do I lose my home if I go into a nursing home?
Not necessarily. Properly transferring your home into a Medicaid Asset Protection Trust or qualifying it under the primary residence exemption can prevent Medicaid from claiming it later.
Take the First Step Toward Peace of Mind
Medicaid planning doesn’t have to be overwhelming. Whether you’re planning ahead or facing a sudden need for care, The Village Law Firm can help you understand your options and protect what matters most.
Schedule a consultation today to create a strategy that fits your family, your finances, and your future.
