Long-Term Care, Medicaid, and the Long Island Home

Long-term care is the retirement expense families plan for last, and it is often the one that decides what an estate looks like. When middle-class households need extended care, they keep just 42% of the wealth they started with. None of that loss goes to taxes. It drains away in nursing facility charges, aide hours, and hospital bills.¹ The odds are not remote, either. Someone turning 65 today has almost a 70% chance of needing some form of care, 20% will need it for more than 5 years.² Now two changes in federal law have made the family home itself harder to protect.

What Care Costs Now

The 2025 CareScout Cost of Care Survey puts the national median for a semi-private nursing home room at $114,975 and a home health aide at 44 hours per week costs about $80,080 per year.³ New York sits far above those medians. The most recent state data prices a semi-private nursing home room at about $176,660 per year, and downstate and Long Island facilities typically run higher still.⁴

Medicare Will Not Pay for It

Medicare covers skilled nursing care only after a 3-day inpatient hospital stay, and only up to 100 days per benefit period. Days 1 through 20 are fully covered, days 21 through 100 carry a $217 daily coinsurance in 2026, and after day 100 the patient pays everything.⁵ Medicare pays nothing for custodial care, the help with bathing, dressing, and eating that makes up most long-term care. That gap explains why Medicaid, not Medicare, paid 61% of the $459 billion the country spent on long-term care in 2023.⁶

Washington Just Narrowed the Safety Net

The One Big Beautiful Bill Act, signed July 4, 2025, tightens Medicaid on two fronts that matter for planning. Starting in 2027, retroactive coverage shrinks from 3 months before application to as little as 1 to 2 months, narrowing the cushion that has long protected families facing a sudden nursing home admission.⁷ Then on January 1, 2028, a national cap takes effect: no more than $1 million of home equity can be excluded when determining Medicaid eligibility for long-term care. The cap is frozen, with no inflation adjustment and no state option to exceed it.^{8, 9} New York currently permits a home equity limit of roughly $1,130,000. That flexibility ends.¹⁰

Here is the Long Island math. Nassau County’s median sale price reached $805,000 in 2025, with single-family homes at $850,000 by early 2026.¹¹ Suffolk medians run about $680,000 to $725,000.¹² A typical Nassau home already sits at about 80% of the frozen cap, and because home values rise while the cap does not, appreciation alone will pull more Long Island homeowners past it each year. The house itself becomes the barrier to coverage.

New York’s Lookback Rules Reward Early Planning

Federal law applies a 5-year lookback to Medicaid, but as of this article New York has only applied it to nursing home care. So, asset transfers within 60 months of an application can trigger a penalty period. A separate 30-month lookback for home care Medicaid was authorized in 2020 but has never been enforced, and as of mid-2026 no local district applies it.¹³ That window remains open, but no family should build a plan on the assumption it stays open. A Medicaid Asset Protection Trust can shelter the home and other assets, but only if funded at least 5 years before a nursing home application. The common thread is lead time. Every effective tool works better 5 years early than 5 minutes late.

Insurance Can Carry Part of the Risk

Traditional long-term care insurance carries a difficult history. Regulators approved more than 3,500 rate increases in 2021 alone, with approved increases averaging 37%.¹⁴ Hybrid policies that pair life insurance with a long-term care benefit now offer guaranteed premiums and a death benefit if care is never needed, a more predictable way to shift part of the risk.

A Coordinated Approach to Protecting the Home

Long-term care planning touches elder law, tax, insurance, real estate, and investments at once, and advice delivered in silos leaves gaps between them. Strata Alliance coordinates the full picture: legal and Medicaid planning with the attorneys at Campolo, Middleton & McCormick, insurance solutions through Strata Coverage, real estate decisions through Strata Realty, and the cashflow plan through Strata Financial.

If long-term care costs could threaten your home or your savings, contact Strata Alliance to learn how our coordinated family office approach can help. The new rules reward families who start 5 years early.

 

Endnotes

1. Kurt Supe, “Three Powerful Forces Are Draining Family Wealth,” MarketWatch, June 17, 2026, reporting an April 2026 Roosevelt Institute analysis, https://www.marketwatch.com/story/the-great-wealth-transfer-is-real-but-the-irs-or-a-nursing-home-might-get-your-money-first-d0c46676.

2. Administration for Community Living, “How Much Care Will You Need?” https://acl.gov/ltc/basic-needs/how-much-care-will-you-need; HHS ASPE, “What Is the Lifetime Risk of Needing and Receiving Long-Term Services and Supports?” https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0.

3. CareScout, “2025 Cost of Care Survey Results,” Mar. 2026, https://investor.genworth.com/news-events/press-releases/detail/1054/carescout-releases-2025-cost-of-care-survey-results.

4. CareScout/Genworth 2024 Cost of Care Survey, New York state data, via Brevy, “Cost of Senior Care in New York,” https://brevy.com/care-types/new-york/cost-of-senior-care.

5. ElderLawAnswers, “Do Medicare Benefits Cover Skilled Nursing Care?” https://www.elderlawanswers.com/do-medicare-benefits-cover-skilled-nursing-care-21358.

6. KFF, “What Long-Term Care Is Covered by Medicaid?” https://www.kff.org/medicaid/health-policy-101-medicaid/?entry=table-of-contents-what-long-term-care-ltc-is-covered-by-medicaid.

7. Justice in Aging, “What’s in the Budget Reconciliation Act of 2025 and What Does It Mean for Low-Income Older Adults?” https://justiceinaging.org/budget-reconciliation-and-low-income-older-adults/.

8. Justice in Aging, “H.R. 1 Imposes New Limit on Home Equity for Medicaid Long-Term Services and Supports Effective 2028,” https://justiceinaging.org/hr1-imposes-new-limit-on-home-equity-for-medicaid-ltss-effective-2028/.

9. ElderLawAnswers, “New Law Caps Home Equity for Medicaid Long-Term Care,” https://www.elderlawanswers.com/new-law-caps-home-equity-for-medicaid-long-term-care-21524.

10. CMS 2026 spousal impoverishment and home equity standards, via Brevy, “Nursing Home Costs in New York,” https://brevy.com/care-types/new-york/nursing-homes.

11. OneKey MLS data, via “Nassau County Housing Market Update,” https://yadlynd.com/blog/nassau-county-housing-market-what-buyers-and-sellers-should-watch.

12. News 12 Long Island, “Nassau, Suffolk Home Prices Soar to New Highs for 2025,” https://longisland.news12.com/nassau-suffolk-home-prices-soar-to-new-highs-for-2025.

13. Brevy, “New York’s 30-Month Medicaid Lookback: Still Not in Effect,” https://brevy.com/medicaid/new-york/30-month-lookback.

14. NAIC rate filing data, via InsuranceNewsNet, “Genworth Financial Taking the Offensive After Years of LTCi Rate Struggles,” https://insurancenewsnet.com/innarticle/genworth-financial-taking-the-offensive-after-years-of-ltci-rate-struggles.