Every week in Brooklyn, an older adult gets a letter saying they are denied Medicaid because their income is too high.
They assume the door is closed, stop asking questions, and start spending down savings they worked for decades to build.
What many people do not know is that New York has a program for this. It is called the Medicaid spend-down, or Medicaid excess income in New York.
Most families who need it have never heard the name.
At Alatsas Law Firm, we help Brooklyn families through these cases every day.
Learning how the New York Medicaid spend-down works, how to calculate your spend-down amount, and which costs count can help you protect your assets instead of losing them to long-term care bills.
This article covers the numbers, the ways to meet your spend-down requirement, the expenses that qualify, and the nursing home rules.
How New York Medicaid spend-down works
New York does not simply reject you when your income is above the Medicaid limit. Instead, the state calculates the gap between what you earn and what the limit allows. That gap is your spend-down amount, sometimes called surplus income or excess income. Meet it each month, and Medicaid coverage starts for the rest of that month.
New York Medicaid income limits 2026
For 2026, the New York Medicaid income limits are $1,836 per month for a single person and $2,489 per month for a couple when both spouses apply. Any income above those levels counts as excess income.
If a person receives $2,200 a month from Social Security, they must spend $364 each month to qualify for coverage.
Here is another example: a couple with $3,000 in combined monthly income has $511 in excess income ($3,000 minus $2,489).
To activate Medicaid coverage for a given month, they must either submit qualifying medical bills totaling at least $511 or pay that amount to the program each month.
Who the spend-down program is for
This program is for non-MAGI Medicaid applicants, usually adults 65 and older, people with disabilities, or people who need long-term care.
It is not available to younger adults who apply through standard marketplace Medicaid.
Nursing home Medicaid New York uses similar income limits, but the rules are different. We explain that below.
Two ways to meet your spend-down requirement
Once you know your excess income amount, you have two options to meet it. Neither option requires you to hand over money before you get care. Each month, you choose the route that fits your situation.
Option 1: Submit medical bills
If your medical bills, paid or unpaid, reach at least your excess income amount, you may submit them to your local Department of Social Services.
Once the office accepts those bills, Medicaid covers eligible services for the rest of that month. One important point: you do not have to pay the bill first. An unpaid bill counts if the service was actually incurred.
Many people choose this route because older adults often have steady medical costs.
If you have regular prescriptions, therapy visits, or specialist care, those costs may meet your monthly limit without extra out-of-pocket spending.
Option 2: Pay in each month
With this option, you pay a monthly fee equal to your excess income. The payment goes directly to the Medicaid program. In return, your coverage starts for that month.
In New York City, payments go through HRA's Division of Accounts Receivable and Billing. Upstate applicants use their local DSS office. County procedures vary, which is one reason local guidance matters.
You can usually pay one to six months at a time. If you pay six months in advance, you can get full Medicaid coverage for that period.
Which expenses count and what proof you need
Not every bill qualifies toward your spend-down amount. New York has specific rules, and the proof requirements are stricter than many families expect.
Approved expenses: what the state accepts
New York counts many medical expenses. Qualifying bills include:
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Doctor visits, dental care, eye exams, and lab tests
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Prescription drugs and medications
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Health insurance premiums, including Medicare-related premiums and private insurance costs
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Medical equipment such as hearing aids, eyeglasses, and prosthetic devices
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Home care, physical therapy, and rides to medical appointments
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Prescription costs covered by programs like EPIC or ADAP, since those payments can count toward your spend-down
What does not count: cosmetics, rent, food, utilities, and general living costs are excluded.
Documentation rules and the timing trap
Two timing rules catch families off guard. Paid bills must have been incurred and paid within the three calendar months before the month you apply. Unpaid bills can be older, sometimes up to six years, as long as they are still legally collectible.
Every bill you submit should include the patient's name, the date of service, a description of the service, and the cost.
In New York City, when you send a fax, include your case number, CIN number, and the month for the coverage you need.
Nursing home Medicaid New York rules that work differently
Community Medicaid spend-down and nursing home Medicaid have the same income limits. But the nursing home rules are much stricter.
Families who do not understand this difference often make decisions that cost them tens of thousands of dollars.
Asset limits, NAMI, and the personal needs allowance
In 2026, a single nursing home applicant must keep countable assets below $33,038 to qualify. Once approved, nearly all monthly income goes to the facility as Net Available Monthly Income, or NAMI. The resident keeps only $50 per month as a personal needs allowance.
Under spousal impoverishment rules, the spouse who stays in the community gets protections for income and resources. That helps preserve more money for the spouse living at home.
The 60-month look-back and why it matters
Unlike community Medicaid, nursing home Medicaid has a 60-month look-back period.
If any assets were given away for less than fair market value in the last five years, it can trigger a penalty period and make you ineligible.
This is where families run into serious trouble without advance planning.
Local DSS or HRA handles the application, not NY State of Health. Errors made before you file can be very hard to fix.
Spend-down rules NY residents should know before filing
The main steps are simple: know how much money you make, figure out what you have left over, choose to pay bills or use the pay-in process, and gather the right paperwork.
File using form DOH-4220, with supplement DOH-5178A when needed. Spend-down is a monthly process. Missing a submission means losing coverage for that month, with no way to get it back later.
Figuring out your spend-down amount is a math exercise.
Protecting your assets while getting Medicaid is smart legal planning. You need someone who understands New York's rules.
At Alatsas Law Firm, attorney Ted Alatsas has spent nearly 30 years helping Brooklyn families handle these decisions, from community Medicaid spend-down to nursing home applications and Medicaid Asset Protection Trusts. The stakes are high, and the first conversation is free. Reach out to our Brooklyn office to schedule your initial consultation before you submit anything to the government.
