Qualifying for Medicaid

By: Shannon McNulty, Attorney, The Village Law Firm

By: Shannon McNulty, Attorney, The Village Law Firm

Shannon's work is sophisticated and reflects her deep knowledge of the laws governing estates, taxation and child guardianship issues. Shannon approaches each client with sensitivity and compassion, understanding that many of the decisions that they will have to make can be difficult.

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Medicaid Eligibility in New York 

November 11, 2023

Medicaid is a state funded long term care program that will pay for home health aides (referred to as Community Medicaid), full cost of the nursing home (referred to as Institutional Medicaid), certain doctors and medications.  To qualify, you must meet strict asset and income eligibility standards.   


As of January 2023, a single applicant can have up to $30,182 and married applicants can have up to a total of $40,821 in assets (also called Resources).  Assets include cash, stocks and bonds, whole life insurance policies, and real property such as vacation homes.   

There are certain resources that are exempt from the asset calculation.  Medicaid does not count the following assets when determining an applicant’s eligibility:   

  • Homestead Exemption   

The applicant’s primary residence, with an equity value of up to $1,033,000, is exempt if the individual applying for Medicaid lives in the home or if applying for Institutional Medicaid, either intends to return to the home or has a spouse or a minor, disabled or caretaker child living in the home.  

A vacation home or a rental property does not qualify for the homestead exemption. 

Although an individual can qualify for Medicaid while owning a home, the property may still be subject to Medicaid recovery.  If the property is owned solely by the Medicaid recipient, upon his or her passing, if the recipient does not have a surviving child who is under 21 years old or who is certified blind or disabled, Medicaid will place a lien on the property.  When the property is sold, the lien must be satisfied before the proceeds are distributed to the beneficiaries or the legal heirs of the estate.   

  • Qualified Retirement Accounts 

Tax deferred accounts such as an IRA, 401(k) and 403(b) are exempt if the applicant receives the minimum amount that must be withdrawn each year under the IRS regulations (the required minimum distribution).   

  • Vehicle   

One automobile, no matter its value, is excluded from the resource calculation. 

  • Term Life Insurance Policy 

It’s important to determine what type of life insurance you own.  Term life insurance is not counted because there is no cash surrender value associated with the policy.   

However, whole life insurance is a countable resource since the owner can borrow against the policy and terminate the policy at any time and receive the cash surrender value.    


A single applicant applying for Community Medicaid can make up to $1,677 per month and married applicants can make up to a combined $2,268 per month in income.  Income includes wages, social security, and distributions from pension, annuity and retirement accounts.   

You can still qualify for Medicaid if your income exceeds the limits.  There are two permissible ways to spend down excess income each month: 

  • Pooled Income Trust   

The applicant can deposit their income overage into a Pooled Income Trust, which is a Medicaid approved trust established to shelter excess income for Community Medicaid applicants.  The trust is managed by a third-party non-profit organization.  The money in the trust can only be used to pay for the applicant’s expenses such as housing, utilities, food and clothing.  Anything remaining in the account after the applicant passes is not returned to the family, but rather belongs to the trust organization.    

  • Spousal Monthly Maintenance Needs Allowance 

The applicant’s spouse is entitled to $3,715.50 a month in income to ensure that he or she has the financial means to pay for basic living expenses.  If the well spouse’s own income is under $3,715.50, the applicant is permitted to transfer the difference from his or her income.   

An applicant receiving Institutional Medicaid is only permitted to keep $50 of income each month.  The remainder of the income must be paid directly to Medicaid to cover the cost of the care provided.   

We at the Village Law Firm have years of experience assisting clients plan and apply for Medicaid and understand the numerous technicalities involved.  We can provide a comprehensive explanation of the Medicaid eligibility requirements and give insight and guidance on how to navigate the application process.  Contact us today to schedule a consultation and find out more. 

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