When a loved one starts showing signs of dementia, your world can quickly change. You might begin noticing confusion, missed appointments, or difficulty remembering close family members. As their condition progresses, the question becomes not just how to care for them, but how to afford the care they need.
In Long Island and across New York, nursing home care for dementia can be financially overwhelming. Families often ask, “does Medicaid cover nursing home care for dementia?” The answer is yes, but there’s a lot to consider when it comes to eligibility, income and asset limits, and how the Medicaid Planning process actually works.
This blog explains how Medicaid can cover nursing home services for dementia patients in Long Island, what the application process looks like, and how you can protect assets while meeting eligibility requirements.
Medicaid Can Cover Long-Term Dementia Care in New York
Medicaid is a joint federal and state program that provides medical assistance to those with limited income and resources. In New York, Medicaid does cover nursing home care. This includes memory care for individuals diagnosed with dementia, including Alzheimer’s disease.
To receive full Medicaid benefits for long-term care, you must meet the state’s financial and medical eligibility requirements. That means you’ll need to qualify based on your health condition and your finances.
What the Medicaid Eligibility Requirements Look Like
To qualify for Medicaid coverage of nursing home costs, an applicant must meet strict income and asset limits. These limits change annually, but as of 2025, the general guidelines for an individual in New York are:
- Income limit: $1,800 per month
- Asset limit: $32,396 in countable resources
Married applicants face more complex rules. If one spouse is applying and the other is not, the spouse remaining at home (the “community spouse”) is allowed to retain a larger portion of the couple’s assets and income under New York’s spousal impoverishment protections.
Some assets are considered non-exempt, meaning they may disqualify you unless they are restructured or transferred appropriately. Others, like a primary residence, may be exempt under specific conditions, but not always. That’s where proper planning becomes important.
How the Medicaid Application Process Works
Applying for long-term care Medicaid in New York is often described as a complicated process for a reason. You’ll need to provide detailed financial records going back five years, including:
- Bank statements and retirement accounts
- Life insurance policies and annuities
- Real estate ownership and transfers
- Caregiver agreements or contracts
- Any asset transfers or gifts
If anything is missing or appears suspicious, the application could be denied or delayed. New York also applies a penalty period if assets were transferred for less than fair market value during the five-year lookback period.
For many New York families, this step is where things get difficult. Some try to handle it on their own, only to face unexpected rejections or delays that increase their financial burden.
Planning Ahead with a Medicaid Asset Protection Trust
One of the most effective tools to protect your assets while preparing for Medicaid eligibility is a Medicaid Asset Protection Trust (MAPT). This type of irrevocable trust allows you to transfer certain assets out of your name and begin the five-year lookback period early.
When structured properly, a MAPT can help:
- Protect your primary residence or other real property
- Shield savings and investments from spend-down
- Allow you to qualify for Medicaid while preserving assets for your family
Because this trust removes control of the assets from your hands, it must be set up correctly. Otherwise, you risk losing both eligibility and access to needed funds.
Nursing Home vs. Community Medicaid in Dementia Cases
Medicaid in New York offers two pathways: nursing home Medicaid and community Medicaid.
- Nursing home Medicaid applies when a person resides in a licensed skilled nursing facility and requires long-term care services. This is typically the route for advanced dementia patients.
- Community Medicaid supports in-home care or care in assisted living facilities, though the latter is more limited in coverage.
Both types of Medicaid require meeting income and asset limits, but the services and planning strategies differ. Some individuals with dementia may transition from community Medicaid to institutional care as the disease progresses.
Common Costs Covered by Medicaid
If you or your family member qualifies for Medicaid coverage, the program may cover:
- Room and board in the nursing home
- Personal and medical care
- Medication management
- Alzheimer’s or memory care services
- Therapy and medical supplies
Not all facilities accept Medicaid, so it’s important to verify whether the nursing home you’re considering participates in the program. Facilities that offer memory care often have limited Medicaid beds, which means advance planning is key.
What About Your Home and Life Insurance?
Many families worry about losing the home if Medicaid is involved. In some cases, Medicaid may place a lien on the property after the recipient passes away through a process known as estate recovery.
There are ways to protect your home without transferring it outright. For example:
- Creating a life estate
- Transferring the home to a spouse or disabled child
- Placing the home in a Medicaid Asset Protection Trust
As for life insurance policies, Medicaid generally considers the cash value of whole life insurance as a countable asset, but term policies with no cash value typically do not affect eligibility. Reviewing these policies early can help avoid surprises during the application process.
Why Many New York Families Work with a Medicaid Planning Attorney
You don’t have to figure everything out on your own. Many New York families turn to a Medicaid Planning attorney or elder law attorney because of how much is at stake. Nursing home bills can exceed $15,000 per month on Long Island, and even a small mistake in the Medicaid application process can lead to long delays in coverage.
An attorney familiar with New York Medicaid Planning can:
- Review your income and asset limits
- Suggest legal techniques for protecting assets
- Help set up caregiver agreements
- Review existing trusts or draft new ones
- Prepare and submit the Medicaid application
- Represent you in any fair hearings or appeals
In short, the right legal guidance can reduce stress, lower your financial exposure, and preserve more of your legacy for your family members.
Protect What Matters Most with Medicaid Planning in Long Island
Dementia changes the way your family functions, but it shouldn’t erase everything your loved one worked for. Whether you’re facing immediate nursing home bills or planning several years ahead, it’s worth taking a closer look at how Medicaid can support your goals without draining your savings.
At Sheryll Law, P.C., we work with individuals and families across Long Island to prepare for Medicaid eligibility and long-term care. Whether you’re just starting the Medicaid Planning process or trying to protect your family’s primary residence, we’ll help you review your options and move forward with a plan that fits your situation.
Your online search for “Medicaid Planning attorneys” or “Medicaid Planning attorney near me” brought you here. Take the next step by calling (631) 506-8440 or filling out our confidential online form to schedule your consultation.
Protect your Legacy with Sheryll Law.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
Sheryll Law, P.C.
633 East Main Street, Suite 2
Riverhead, New York 11901
(631) 506-8440
https://sheryll-law.com/
