Why this blog matters
The One Big Beautiful Bill Act (OBBBA), passed in July 2025, makes major updates to Medicaid that affect how older adults in New York qualify for long-term care. While most news coverage focused on tax changes, the law also reshapes how Medicaid determines eligibility and funds care for seniors.
If you or a loved one may need Medicaid to help pay for nursing home or in-home care, here’s what you need to know—and what you can do to protect your estate from unexpected costs.
1. A New Home Equity Limit for Long-Term Care Medicaid
Under the OBBBA, applicants with more than $1 million in home equity are no longer eligible for Medicaid long-term-care benefits.
Even if your income is modest, owning a high-value home could now disqualify you from Medicaid coverage for nursing home or home-care services. The law does not adjust this limit for inflation, so the $1 million figure will stay fixed over time.
Seniors who wish to preserve their homes while planning for future care should review strategies such as Medicaid Asset Protection Trusts well in advance. These trusts can help remove your home from the calculation of available assets, while keeping it safe for your heirs.
2. Shorter Retroactive Coverage Period
Previously, Medicaid could cover up to three months of medical expenses incurred before an application was submitted. The OBBBA now limits this to one month.
While approvals for retroactive coverage were already rare, this change makes timing even more critical. Because long-term-care needs can arise suddenly, proactive planning helps ensure you won’t face a gap in coverage when you need help most.
3. More Frequent Eligibility Reviews
The OBBBA also requires more frequent eligibility checks—in some cases, every six months instead of annually.
This means seniors must respond quickly to requests for paperwork, such as income or asset verification. Missing a deadline could result in a temporary suspension or loss of coverage, even for those who remain eligible.
To avoid interruptions, consider designating a trusted family member or legal representative to help manage documentation and communication with Medicaid offices.
4. Tighter Funding Rules for Nursing Homes and Care Providers
The new law restricts how states can use “provider taxes” to fund Medicaid programs. These taxes are often used to draw down federal matching dollars for nursing homes and home-care services.
As a result, states like New York may experience budget pressure that affects reimbursement rates or the availability of certain long-term-care programs. Seniors who rely on Medicaid-funded facilities may see future changes in program options or stricter eligibility criteria.
To understand how these funding shifts could impact your long-term care options, it’s wise to revisit your estate and Medicaid planning strategy now.
5. Build Flexibility Into Your Plan
With Medicaid funding rules in flux, flexibility is key. Eligibility criteria could tighten in the future, and benefits may change.
You may wonder whether Medicaid planning still makes sense under the OBBBA. The answer is yes—if done carefully. Medicaid planning involves transferring assets to trusted individuals or a trust. The key is ensuring those assets remain accessible if Medicaid benefits are reduced or unavailable.
At The Village Law Firm, we help clients create comprehensive, flexible plans that protect assets while maintaining access to care. Steps you can take now include:
- Reviewing your home ownership structure to understand how equity might affect future eligibility.
- Keeping your financial and legal records up to date for easier verification.
- Considering a Medicaid Asset Protection Trust or other estate-planning tools that preserve eligibility.
- Speaking with an elder law attorney to understand how the new $1 million home-equity cap affects you.
For additional guidance, see our related post: How Pending Medicaid Changes Will Impact Long-Term Care Planning in New York.
Final Thoughts
The OBBBA represents the most significant Medicaid update in years. For New York seniors and their families, these changes could dramatically affect long-term-care planning and estate protection.
If you or a loved one may need Medicaid in the next few years, now is the time to review your plan. Early, informed action can help protect your home, savings, and family under the new rules.
Contact The Village Law Firm today to discuss how these Medicaid updates impact your estate plan and to start planning with confidence.
