If you've ever started a Medicaid application and worried whether you might be denied, you're not alone. Many middle-income families in Brooklyn and across New York face this same anxiety. Understanding what disqualifies you from Medicaid can help you avoid costly mistakes and plan strategically to protect your family's future.
Let me share something I've seen countless times over nearly three decades of practicing elder law: families who lose thousands of dollars in assets—or face delayed coverage during urgent medical situations—simply because they didn't understand Medicaid's eligibility rules. The good news? Most disqualifications are preventable with proper planning.
The Financial Factors That Can Disqualify You
Income Limits
In New York, exceeding monthly income limits is one of the most common reasons for Medicaid denial. For 2026, a single individual applying for long-term care Medicaid (such as nursing home care) must have monthly income under $1,835. Married couples face a limit of approximately $2,433 per month for Community Medicaid.
Here's what many people don't realize: even if your income exceeds these limits, you're not necessarily out of options. New York offers a "spend-down" program where you can use your excess income to pay for medical expenses, effectively lowering your countable income to meet eligibility requirements. It's similar to a deductible—once you've spent enough on healthcare costs, Medicaid coverage can kick in.
Asset Limitations
The asset test is where things get complicated. For individuals 65 and older or those with disabilities applying for long-term care Medicaid in New York, the asset limit is $32,396 for a single person in 2026. Married couples have different rules depending on whether one or both spouses need care.
Not all assets count toward this limit. Your primary residence is typically exempt if you, your spouse, or a minor or disabled child lives there. One vehicle, prepaid burial arrangements, and retirement accounts like IRAs and 401(k)s are also generally excluded from the calculation.
What gets people into trouble? Cash savings, investment accounts, second homes, and valuable personal property all count toward the limit. I've worked with families who unknowingly held just enough in savings to disqualify themselves—often by only a few thousand dollars.
The Five-Year Lookback Period
This is perhaps the most misunderstood aspect of Medicaid eligibility. When you apply for long-term care Medicaid, New York State examines your financial transactions for the previous five years. Any gifts or asset transfers made for less than fair market value during this period can result in a penalty period where you're temporarily disqualified from coverage.
The penalty is calculated by dividing the total value of transferred assets by the average monthly cost of nursing home care in your region. For example, if you gave your daughter $100,000 three years ago, and the monthly nursing home rate is $12,000, you'd face an approximately 8-month penalty period.
Many families make well-intentioned mistakes here—transferring their home to children to "protect it," only to discover this creates Medicaid ineligibility when they need coverage most. Proper planning with instruments like irrevocable trusts can accomplish asset protection goals without triggering penalties, but timing is critical.
Non-Financial Disqualifications
Residency and Citizenship Requirements
To qualify for Medicaid in New York, you must be a resident of the state. Additionally, you generally need to be a U.S. citizen or qualified non-citizen. However, New York does provide emergency Medicaid coverage for undocumented immigrants regardless of age, and full-scope Medicaid is available to undocumented seniors 65 and older.
Application Documentation Issues
Surprisingly, many denials stem from paperwork problems rather than actual ineligibility. Common documentation issues include:
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Incomplete application forms
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Missing bank statements or financial records
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Failure to provide proof of residency or citizenship
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Not responding to requests for additional information within required timeframes
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Simple errors like typos in names or Social Security numbers
These administrative denials are frustrating because they're entirely preventable. Having organized financial records and working with an experienced professional can help ensure your application is complete the first time.
What Doesn't Disqualify You (Common Misconceptions)
I regularly encounter clients who assume they can't qualify for Medicaid because of factors that actually don't affect eligibility:
Owning Your Home: Your primary residence is exempt from asset calculations in most cases, though there are equity limits for certain programs.
Having a Car: One vehicle is exempt regardless of value.
Receiving Certain Income: Child support, VA benefits, and worker's compensation don't count toward income limits in many situations.
Past Medicaid Denials: You can reapply for Medicaid anytime your financial or medical situation changes. A previous denial doesn't permanently disqualify you.
How to Navigate Potential Disqualifications
If you're concerned about qualifying for Medicaid, the most important step is to start planning early. The five-year lookback period means that effective asset protection strategies require time to implement. Waiting until a medical crisis occurs severely limits your options.
Consider these proactive steps:
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Document Everything: Maintain clear records of all financial transactions, especially large ones. If you need to apply for Medicaid, you'll need to provide detailed financial documentation.
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Understand Exempt Assets: Make sure you know which assets count toward Medicaid limits and which don't. This knowledge can help you restructure your finances strategically.
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Explore Legal Planning Tools: Irrevocable trusts, annuities, and other planning instruments can help protect assets while maintaining Medicaid eligibility—but they must be established properly and well in advance.
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Address Issues Before Applying: If you've made asset transfers or have income that exceeds limits, working with an elder law attorney before applying can help you develop strategies to address these barriers.
At Alatsas Law Firm, we've helped countless Brooklyn families navigate these complex rules to secure Medicaid coverage while protecting their hard-earned assets. The key is understanding that Medicaid planning isn't about hiding assets—it's about legally structuring your finances to meet eligibility requirements while preserving your family's financial security.
Moving Forward with Confidence
Medicaid disqualifications can feel like overwhelming obstacles, but they don't have to derail your family's financial future. Understanding the rules around income, assets, transfers, and documentation gives you the power to plan effectively. Whether you're years away from potentially needing long-term care or facing an immediate situation, knowing what disqualifies you from Medicaid is the first step toward developing a strategy that protects both your eligibility and your legacy.
Remember, most families have more options than they initially realize. The difference between a denied application and approved coverage often comes down to timing, planning, and having the right guidance. If you're worried about Medicaid eligibility for yourself or a loved one, don't wait until a crisis forces your hand—start the conversation now about how to structure your affairs for both protection and peace of mind.
