Protecting a Lifetime of Savings from Cost of Long-Term Care

Most people picture their savings carrying them comfortably through retirement. Far fewer plan for the single expense most likely to drain those savings: long-term care. How that care gets paid for — and where Medicaid fits in — is the subject of a recent article from LTC News, “Medicaid Asset Limits Rise in Select States for 2026: What It Means for Long-Term Care.”

The first surprise for many families is what Medicare does not do. Medicare generally does not pay for ongoing custodial long-term care — the day-to-day help with bathing, dressing, eating and getting around that someone may need for years. It covers limited short-term skilled care, and that is largely it. When a parent or spouse needs sustained help, that gap lands squarely on the family.

Medicaid is the program that does pay for long-term care. However, qualifying means meeting strict income and asset limits, and those limits vary by state. In many states, a single applicant has long been expected to spend down countable assets to roughly $2,000, though a few states have begun allowing more — Pennsylvania, New York, Illinois and Maine among them. Either way, that leaves many middle-income retirees in an uncomfortable squeeze: too much saved to qualify easily, but not enough to comfortably pay out of pocket. Understandably, few people want to drain everything they have just to reach a government threshold.

There are planning tools that can help. However, timing is everything. A Medicaid Asset Protection Trust can shield certain assets, so they are not counted toward eligibility — but only if it is set up well in advance. In most states, such as Pennsylvania, Medicaid reviews the previous five years of financial transactions, a window known as the “look-back period.” Gifts or transfers made during that window can trigger a penalty that delays coverage. The common instinct — quickly moving money to the kids once care is on the horizon — often backfires, leaving the family ineligible at the exact moment they need help most.

There is also relief built in for married couples. When one spouse needs care, spousal protections may let the healthy spouse keep a portion of the couple’s assets and income, so they are not left impoverished at home. The exact amounts vary by state. However, the goal is the same: covering one person’s care should not financially sink the other.

At Curran Estate & Elder Law, we can work together with families to protect assets.  It is possible to protect practically 100 percent of a couple's assets in most scenarios, and it is possible to protect 50 to 60 percent of an individual's assets for his or her heirs in most scenarios.  Be proactive; take the time to speak with an elder law attorney who can work together with you to protect and preserve your hard-earned assets.

The thread through all of this is that these rules are complicated, they differ from state to state and they change. A misstep can cost a family dearly. The best move is to talk through your situation with an experienced elder law attorney — ideally well before care is needed — who can explain how a Medicaid Asset Protection Trust and other strategies that might protect a lifetime of savings while making sure that your loved one still gets quality care.

Reference: LTC News (June 1, 2026) “Medicaid Asset Limits Rise in Select States for 2026: What It Means for Long-Term Care”