The U.S. healthcare system can be complicated to tackle, especially when it comes to comparing Medicaid and Medicare. Although both programs offer essential health coverage, they are designed for different groups and follow separate rules for eligibility, benefits, and enrollment. In New York, where healthcare and long-term care costs run high, having clear information about how these programs work can make a significant difference in planning and decision-making for yourself or a loved one.
For those looking to protect assets, plan for long-term care, or ensure they qualify for Medicaid without jeopardizing financial stability, consulting a Long Island Medicaid planning lawyer is essential. The nuances of Medicaid eligibility, especially when nursing home or home care coverage is needed, require strategic legal guidance. At Schlessel Law, PLLC, our experienced team of Long Island Medicaid planning lawyers is here to help you understand the system with clarity and confidence. Call us today at (516) 574-9630 for a personalized consultation and get the legal support you need for smart, secure planning.
How Will You Pay for Long-Term Care in New York?
For countless New York families, planning for retirement and old age revolves around a central, often unspoken anxiety: the staggering cost of long-term care. Whether the need arises from a sudden illness or the gradual effects of aging, the financial impact can be devastating. In regions such as Long Island, the average monthly cost for nursing home care can exceed $14,900, with similarly daunting rates in New York City and Westchester. Faced with these figures, a lifetime of savings can disappear in a matter of months.
Medicare vs. Medicaid: A Critical Distinction
A widespread and dangerous misunderstanding lies in the roles of two government programs: Medicare and Medicaid. Their names sound alike, but their functions, eligibility rules, and coverage limits for long-term care are entirely different.
Many people assume that Medicare, the health insurance program they have contributed to throughout their working lives, will cover an extended stay in a nursing home or ongoing in-home care. This assumption can lead to catastrophic financial consequences.
- Medicare is designed for acute medical care, short-term needs such as doctor visits, hospital stays, and surgeries. It does not cover long-term custodial care.
- Medicaid, on the other hand, is the primary source of payment for long-term care in the United States. For seniors who need ongoing help with daily living, whether in a nursing facility or at home, Medicaid often becomes the only viable option.
Why Understanding This Difference Protects Your Future
The distinction between these programs is more than bureaucratic detail; it is a financial lifeline. Failing to understand it is one of the greatest risks to the financial security of New York seniors and their families. Without proper planning, families may have to resort to spending down assets rapidly to meet eligibility requirements or worse, face an inability to pay for the care they need.
Medicare: The Federal Health Plan and Its Critical Limits
Medicare is a federal health insurance program that forms the bedrock of healthcare for most older Americans. Understanding exactly what Medicare does, and more importantly, what it does not do, is the first step in responsible financial planning for later years.
Who Is Eligible for Medicare?
Medicare eligibility is based on age or disability, not on financial need. It is an entitlement program earned through years of paying Medicare taxes. In general, you are eligible for Medicare if you are a U.S. citizen or have been a legal resident for at least five years and meet one of the following criteria:
- Age 65 or older: This is the most common path to eligibility. Most individuals sign up during their Initial Enrollment Period, which begins three months before their 65th birthday.
- Under 65 with a qualifying disability: Individuals who have received Social Security Disability Insurance (SSDI) benefits for 24 months usually qualify, regardless of age.
- Any age with specific medical conditions: A diagnosis of End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s disease) may qualify someone for Medicare without a waiting period.
Because eligibility is not means-tested, your income and assets do not determine whether you qualify. However, as explained below, higher income levels can increase the premiums you pay.
The Real Cost of Medicare in 2025
While many people receive Medicare Part A (Hospital Insurance) without a monthly premium because of their work history, Medicare is far from free. Costs include premiums, deductibles, and coinsurance, all of which can add up quickly.
Part A covers inpatient care in hospitals and skilled nursing facilities, as well as hospice care and some home health services. For 2025, most people pay no monthly premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. Those with 30 to 39 quarters of coverage pay $285 per month, while those with fewer than 30 quarters pay $518 per month. There is also a hospital deductible of $1,676 for each benefit period. After meeting the deductible, the first 60 days of inpatient care are fully covered, but from days 61 through 90, there is a daily coinsurance of $419. For lifetime reserve days, the coinsurance jumps to $838 per day.
Part B covers doctors’ services, outpatient care, durable medical equipment, and preventive services. The standard monthly premium for Part B in 2025 is $185.00, but individuals with higher incomes pay more through an adjustment known as the Income-Related Monthly Adjustment Amount (IRMAA). For example, someone with a modified adjusted gross income above $106,000, or a married couple above $212,000, will face higher premiums. The annual deductible for Part B is $257, and after meeting it, most services require a 20 percent coinsurance payment.
The Long-Term Care Gap: Medicare’s 100-Day Coverage
The most critical limitation of Medicare is its near-total lack of coverage for long-term custodial care. Custodial care includes help with activities of daily living such as bathing, dressing, eating, and transferring. This is exactly the type of care that most nursing home residents need. Medicare does not pay for this kind of care.
The program does offer a very limited benefit for skilled nursing facility care, but strict rules and short timeframes create what many families experience as a financial cliff. To qualify for any skilled nursing facility coverage under Medicare Part A, all of the following must be true:
- There must be a qualifying prior inpatient hospital stay of at least three consecutive days
- The individual must be admitted to the skilled nursing facility for the same condition that required hospitalization
- The admission to the facility generally must occur within 30 days of the hospital discharge.
Even when these conditions are met, the coverage is temporary. For the first 20 days in a skilled nursing facility, Medicare pays 100 percent of the cost. For days 21 through 100, Medicare pays only part of the cost, and the patient is responsible for a daily coinsurance payment of $209.50 in 2025. After day 100, Medicare pays nothing at all. From that point on, the individual is responsible for the entire cost, which can quickly reach many thousands of dollars each month.
This coverage structure is designed for short-term rehabilitation after an acute illness or injury, not for chronic conditions like Alzheimer’s, Parkinson’s, or severe frailty that require ongoing care for months or years. The abrupt shift from partial coverage to no coverage after day 100 is a financial shock for families who mistakenly believed Medicare would serve as a long-term safety net. Instead, they discover that the net disappears just as the need for support continues. This harsh reality is why understanding and planning around New York’s Medicaid program is not just helpful, it is absolutely essential.
What Sets New York Medicaid Apart From Medicare?
While Medicare falls short in covering long‑term care, New York’s Medicaid program steps in to fill this critical gap. For many middle‑class families, Medicaid is not a welfare program in the traditional sense. Instead, it is an essential financial planning tool, often the only way to afford long‑term nursing home or home‑based care without liquidating the assets built over a lifetime. Accessing these benefits, however, requires facing complicated and unforgiving financial eligibility rules.
The True Purpose of Medicaid for New York Seniors
Medicaid is a joint federal and state program that provides health coverage to low‑income individuals of all ages. While it supports many groups, including children and pregnant women, its most vital role for seniors is as the primary payer for long‑term care services. This includes full coverage for care in a residential nursing facility and coverage for home and community‑based services, such as personal care aides, adult day health care, and private duty nursing through programs like Managed Long‑Term Care.
Even seniors with strong Medicare coverage and supplemental insurance often find themselves turning to Medicaid once a chronic illness creates a need for ongoing care.
Passing New York’s Strict Financial Tests
Unlike Medicare, Medicaid is means‑tested. Eligibility is determined by a thorough review of both income and assets. In New York, the financial thresholds are very low, which means that without proactive planning, most seniors will not qualify until they have spent nearly all of their resources.
For 2025, an individual applying for long‑term care Medicaid in New York may not have more than $32,396 in countable assets. For those receiving care at home, the monthly income limit is $1,800, although excess income can often be managed through a pooled income trust. For those in a nursing home, almost all monthly income, including Social Security and pension payments, must be applied toward the cost of care. Only a small personal needs allowance of $50 per month can be kept.
The rules go beyond simple numbers. Certain assets are countable while others are exempt. Countable assets include cash, checking and savings accounts, stocks, bonds, investments, and any real estate other than the primary residence. Exempt assets include the primary residence (if the applicant or a spouse lives there and the equity value is under $1,097,000 in 2025), one automobile of any value, and retirement accounts such as IRAs and 401(k)s, as long as they are in payout status with required minimum distributions being taken. Pre‑paid funeral and burial arrangements are also exempt, as are most personal property and household furnishings.
These exemptions are not always obvious, and the rules can change. These nuances turn Medicaid eligibility from a straightforward checklist into a challenging legal puzzle.
The Five-Year Look-Back: Medicaid’s Memory
To prevent applicants from giving away assets to meet eligibility limits, New York Medicaid imposes a five‑year look‑back period for nursing home care. When someone applies, caseworkers review all financial records from the past 60 months. Any assets transferred for less than fair market value, such as gifts to family members, property sold at a steep discount, or large unexplained withdrawals, will trigger a penalty period.
This penalty period is calculated by dividing the value of the improper transfers by the average monthly cost of nursing home care in the applicant’s region. For example, in Long Island, where the average monthly cost is $14,914, a gift of $149,140 made within the look‑back period would result in a penalty period of 10 months. During those months, the individual would be responsible for paying all care costs out of pocket.
The look‑back rule makes it clear that New York rewards those who plan ahead. With discussions underway about implementing a 30‑month look‑back period for community‑based care in the future, the regulatory landscape is constantly evolving. This makes early planning and professional legal guidance not only helpful but absolutely essential to protect your life’s savings.
| Feature | Medicare | Medicaid |
|---|---|---|
| Purpose | Covers acute medical needs | Covers long-term care needs |
| Type of care covered | Doctor visits, hospital stays, surgeries | Custodial care in nursing homes or at home |
| Long-term care | Not covered | Often the only viable option for long-term care |
| Payment source | Based on contributions during working years | Government program for those who qualify |
Long Island Medicaid Planning Lawyer Seth Schlessel
Seth Schlessel is the Managing Member and Founder of Schlessel Law PLLC, a Long Island-based firm focused on elder law, estate planning, and Medicaid planning. With a hands-on approach to complex cases, Seth personally guides clients through the often-overwhelming process of securing long-term care benefits while preserving family assets.
A graduate of Touro Law School in 2013, Seth held several leadership roles during his time there, including serving as Vice President of the Sports and Entertainment Society. He was admitted to the New York Bar in 2014 and has since built a reputation for delivering compassionate, results-driven legal counsel to families across Long Island.
A Guide for Married Couples: New York’s Spousal Impoverishment Rules
When one spouse needs long-term care and the other remains at home, families often face a difficult mix of emotional and financial pressures. To prevent this, federal law and New York State law provide important spousal impoverishment protections. These rules are not just a safety net; they form the foundation of effective Medicaid planning for married couples.
Preventing Poverty: The Goal of Spousal Protection
The guiding principle behind spousal impoverishment protections is to treat the couple’s finances as a whole while carving out a legally protected share for the community spouse. This ensures the spouse needing care can qualify for Medicaid without forcing the healthy spouse to give up everything. These protections create room for an experienced elder law attorney to help preserve a significant portion of a couple’s assets while still securing long-term care benefits.
A Deep Dive into the 2025 Protections
Two key protections safeguard the community spouse: the Community Spouse Resource Allowance (CSRA) and the Minimum Monthly Maintenance Needs Allowance (MMMNA).
Community Spouse Resource Allowance (CSRA)
This allowance sets the amount of combined countable assets the community spouse is allowed to keep. In 2025, New York allows the community spouse to retain up to $157,920, while ensuring they keep at least $74,820. The exact amount is calculated as one-half of the couple’s total countable resources, but it will never fall below the minimum or rise above the maximum. Importantly, this allowance is in addition to the $32,396 in assets that the applicant spouse is permitted to retain. This rule alone enables married couples to protect far more than single applicants.
Minimum Monthly Maintenance Needs Allowance (MMMNA)
This rule protects the community spouse’s income. In 2025, the community spouse is entitled to a total monthly income of up to $3,948. If the community spouse’s own income from wages, pensions, or Social Security is below this figure, they can receive a transfer of income from the institutionalized spouse to bring them up to the allowance. This transferred income is not counted against the applicant spouse’s Medicaid eligibility and helps ensure that the healthy spouse can meet their own living expenses.
Spousal Refusal
New York also offers a unique planning tool known as spousal refusal, often referred to as the “just say no” strategy. Through spousal refusal, the community spouse formally declares that they will not contribute their income or assets, beyond the protected allowances, toward the cost of care for the institutionalized spouse.
Once this refusal is in place, the applicant spouse’s eligibility for Medicaid is determined based solely on their own income and assets rather than the couple’s combined resources. This can allow for immediate qualification for benefits. However, spousal refusal is not a simple or risk-free tactic. The state and local social services agencies can later attempt to recover contributions from the community spouse, sometimes through court action. Used strategically and with the guidance of an experienced attorney, spousal refusal can provide critical relief while creating time and leverage to negotiate a fair resolution with the state.
Trusted Guidance from Schlessel Law, PLLC
Making informed decisions about Medicare and Medicaid can be overwhelming, especially with evolving regulations and high stakes for long-term care and financial security. At Schlessel Law, PLLC, we help New Yorkers understand both programs with personalized legal strategies that align with your health, family, and financial goals.
Don’t leave your future to chance. Call Schlessel Law, PLLC today at (516) 574-9630 to schedule a consultation with a knowledgeable attorney who can help you plan smartly and protect what matters most.
from Schlessel Law https://www.schlessellaw.com/medicaid-vs-medicare-a-critical-guide-for-new-yorkers/
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