When you or a loved one begins exploring Medicaid coverage for long-term care, one of the first questions that arises is: "How much savings is too much?" For middle-income families in Brooklyn and across New York, this concern isn't abstract—it's deeply personal. You've worked hard to build a nest egg for retirement, and the thought of disqualifying yourself from critical healthcare support can feel overwhelming.
The reality is that Medicaid does place limits on how much you can have in countable assets and still qualify for coverage. Understanding these thresholds—and the strategies available to protect your savings while remaining eligible—can make all the difference in securing both quality care and financial peace of mind.
Understanding Medicaid's Asset Limits
In most states, Medicaid long-term care programs impose strict asset limits. For 2026, the standard individual asset limit remains $2,000 in countable assets for nursing home Medicaid and home and community-based services (HCBS) waivers. For married couples applying together, the limit is typically between $3,000 and $4,000, depending on the state.
However, important exceptions exist. States like New York have higher asset limits—currently $32,396 for individuals and $43,781 for couples applying together. California recently reinstated asset limits for non-MAGI (non-expansion) programs at $130,000 for individuals and $195,000 for couples, effective January 1, 2026.
These numbers represent countable assets—the resources Medicaid considers when determining eligibility. Not all assets count toward this limit, which is where strategic estate planning becomes essential.
What Counts as an Asset?
Medicaid divides assets into two categories: countable and exempt (non-countable). Understanding the difference is crucial.
Countable assets include:
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Cash, checking, and savings accounts
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Stocks, bonds, and mutual funds
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Certificates of deposit (CDs)
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Second homes or investment property
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Additional vehicles beyond the primary car
Exempt assets that do not count toward the limit include:
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Your primary residence (with certain equity limits)
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One vehicle
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Personal belongings and household goods
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Irrevocable burial or funeral trusts (up to specific limits)
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Small life insurance policies (total face value under $1,500)
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Certain business property essential for self-support
Your home is generally exempt if you intend to return or if a spouse, minor child, or disabled adult child lives there. However, home equity limits may apply. In New York, for example, home equity above $1,092,000 (as of 2026) may affect eligibility.
The Community Spouse Resource Allowance (CSRA)
If you're married and only one spouse needs long-term care, Medicaid provides important protections for the healthy spouse remaining in the community. The Community Spouse Resource Allowance (CSRA) allows the non-applicant spouse to keep a significant portion of jointly owned assets.
For 2026, the maximum CSRA is $162,660, up from $157,920 in 2025. The minimum CSRA is $32,532. States set their own limits within this range, and many use the maximum. This means that when one spouse enters a nursing home, the community spouse can retain up to $162,660 in countable assets (in addition to all exempt assets), while the institutionalized spouse must still meet the $2,000 individual limit.
This protection ensures that the healthy spouse isn't forced into poverty while their partner receives necessary care—a crucial safeguard for families facing difficult decisions about long-term care.
What If You're Over the Limit?
If your countable assets exceed Medicaid's eligibility threshold, you're not without options. Several legal strategies can help you qualify without simply giving away your savings, which could trigger penalties.
The Look-Back Period and Penalties
Before exploring strategies, it's vital to understand Medicaid's 60-month look-back period. When you apply for Medicaid, the agency reviews all asset transfers made in the previous five years. If you gifted assets or sold them below fair market value during this period, Medicaid may impose a penalty period during which you're ineligible for benefits.
The penalty is calculated by dividing the total amount transferred by your state's average monthly cost of nursing home care. For example, if you gifted $100,000 and your state's average monthly cost is $10,000, you'd face a 10-month penalty period.
This is why proactive planning—ideally well before care is needed—is so important.
Spend-Down Strategies
One of the most straightforward approaches is to "spend down" excess assets on allowable purchases. Medicaid permits you to reduce your countable assets by:
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Paying off existing debts (mortgage, credit cards, medical bills)
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Making necessary home repairs or modifications for accessibility
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Purchasing a new vehicle or replacing an old one
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Prepaying funeral and burial expenses through irrevocable trusts
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Buying exempt assets like household goods or personal items
These expenditures must be for fair market value and genuinely benefit you or your spouse. Simply spending money frivolously or giving it away can result in penalties.
Medicaid-Compliant Annuities
A Medicaid-compliant annuity converts a lump sum of countable assets into an income stream. When structured correctly, the annuity itself becomes non-countable, though the income it generates may count toward income limits. This strategy is complex and must comply with strict federal and state rules, including naming the state as a beneficiary to the extent of Medicaid benefits paid.
Asset Protection Trusts
An irrevocable trust can shield assets from Medicaid's resource calculations, but only if established before the look-back period. Once you transfer assets to an irrevocable trust and relinquish control, those assets generally won't count toward Medicaid eligibility—provided you survive the five-year look-back.
This strategy requires careful legal structuring and a long planning horizon, making early consultation with an experienced elder law attorney essential.
Why Early Planning Matters
Many families don't consider Medicaid planning until a health crisis forces the issue. Unfortunately, by that point, options may be severely limited. The five-year look-back period means that the best time to begin asset protection planning is now—before long-term care becomes an immediate need.
At Alatsas Law Firm, we've seen firsthand how thoughtful, proactive planning can protect families from losing their life savings to nursing home costs. With nearly 30 years of experience serving Brooklyn, Queens, and Staten Island families, we understand the unique financial pressures middle-income households face. We help clients navigate Medicaid's complex rules, preserve assets legally and ethically, and ensure their loved ones receive quality care without financial devastation.
Taking the Next Step
If you're wondering whether your savings exceed Medicaid's limits—or if you're concerned about protecting your assets while planning for potential long-term care needs—you don't have to navigate these questions alone. The rules are complex and vary by state, and even small mistakes can result in costly penalties or denied benefits.
Professional guidance can help you understand your specific situation, identify exempt assets, explore spend-down options, and implement protective strategies tailored to your family's needs and timeline. Whether you're planning years in advance or facing an urgent need for care, experienced legal counsel can make a significant difference in preserving your financial security.
Your family's future deserves more than guesswork. Reach out to an elder law attorney who understands both the legal landscape and the emotional weight of these decisions. Together, you can create a plan that honors your hard work, protects your loved ones, and ensures access to the care you need when you need it most.
