By John F. Davenport, Esq. | Davenport & Associates, Norwalk, CT | April 7, 2026
Nobody plans for a nursing home. And then one day, it becomes the only conversation that matters.
The average semi-private nursing home room in the United States now costs $114,975 per year. In Connecticut, that number is significantly higher. And the average person who needs long-term care requires it for approximately four years, meaning the total out-of-pocket exposure for a single person can easily exceed $400,000 to $500,000.
Most families assume Medicaid will cover it. Medicaid does cover long-term care but only after you have spent down nearly all of your assets. In 2026, the Medicaid asset limit for a single individual is $2,000 in most states, including Connecticut.
The critical point that most families miss: there are legal strategies that protect your home and your savings from long-term care costs but they require planning years in advance. Waiting until care is needed means most of those options are no longer available.
And the urgency in 2026 is higher than it has been in years. The One Big Beautiful Bill Act, signed into law in 2025, included sweeping Medicaid changes that will begin phasing in over the coming years. Families who counted on Medicaid as a long-term care backstop need to reassess.
As a licensed estate planning attorney in both Connecticut and New York with over 30 years of experience, this is the conversation I wish more families had ten years earlier. Here is what you need to know now.
Before talking about protection strategies, families need to understand the numbers. These are current 2026 median costs based on survey data from CareScout, A Place for Mom, and the Federal Long Term Care Insurance Program.
| Type of Care | Monthly Cost (2026 Median) | Annual Cost | Notes |
| Assisted Living | $6,200/month | $74,400/year | Varies widely by state and level of care |
| Nursing Home (Semi-Private) | $9,562/month | $114,975/year | Medicare covers short-term skilled only |
| Nursing Home (Private Room) | $10,920/month | $131,040/year | Medicaid covers semi-private rooms only |
| In-Home Care (Non-Medical) | $33-$35/hour | Varies by hours | 44+ hrs/week exceeds assisted living cost |
| Memory Care | $6,200+ /month | $74,400+/year | Add $1,000-$2,000/mo above standard AL |
| Sources: CareScout Cost of Care Survey (2025 data), A Place for Mom 2026 Costs of Long-Term Care Report, AARP Public Policy Institute 2026 Report.Connecticut nursing home costs are substantially higher than national medians — often $15,000+ per month for a semi-private room.New York nursing home costs also significantly exceed national averages in most counties. |
The AARP Public Policy Institute released data in March 2026 showing that long-term care costs have surged since 2019, with nursing home costs up 25% and assisted living up nearly 50% over that period, while household income for those 65 and older grew only 22%. The gap between what care costs and what retirees can afford is widening every year.
And these numbers do not include the cost of in-home care before a facility becomes necessary, or the family caregiving burden that is increasingly falling on adult children.
Medicaid is the primary payer for long-term care in the United States. Medicare is not, a distinction most people do not understand until it is too late.
Medicare covers skilled nursing facility care only under very specific conditions: you must have been hospitalized for at least three days, admitted to a Medicare-certified facility within 30 days of the hospital stay, and require skilled care such as physical therapy or rehabilitation. Medicare covers days 1-20 at 100%, then charges a daily coinsurance of $217 per day for days 21-100 in 2026, and covers nothing after day 100.
The care most people actually need in their later years, help with bathing, dressing, eating, and daily activities is custodial care. Medicare does not cover it.
Medicaid covers custodial long-term care, but with strict eligibility requirements:
| The 5-Year Lookback: The Most Misunderstood Rule in Elder LawMany families believe they can simply give their assets to their children and then qualify for Medicaid.This does not work. Any transfer within 5 years of applying triggers a penalty period of ineligibility, calculatedby dividing the transferred amount by the average monthly nursing home cost in your area.Example: You transfer $150,000 to your children in 2025 and apply for Medicaid in 2027.CT average nursing home cost: approximately $15,000/month.Penalty: $150,000 / $15,000 = 10 months of Medicaid ineligibility. You pay privately during that window.Planning must happen BEFORE the 5-year window begins, which means planning today. |
| Upcoming Changes Under the One Big Beautiful Bill Act (OBBBA)The OBBBA, signed in 2025, included an estimated $1 trillion in Medicaid cuts over 10 years.Most relevant for long-term care planning: starting January 1, 2028, the OBBBA imposes a$1 million cap on home equity for Medicaid long-term care eligibility.In states like Connecticut and New York, where homes commonly exceed $500,000-$1 million+,this changes the planning calculus significantly for families who relied on the home as an exempt asset.The 2028 deadline is 21 months away. Families who need to act have a narrowing window. |
The specific impact in CT and NY:
| Have Questions About Long-Term Care Planning? John F. Davenport, Esq. is a licensed estate planning attorney in both Connecticut and New York. He helps families build strategies to protect their homes and assets from long-term care costs, well before a crisis. Free 15-minute consultation. -> Schedule a Free Review -> jdavenportassociates.com/contact-us |
The good news: there are legitimate, legal strategies to protect a significant portion of your assets from long-term care costs. Each has specific timing requirements, trade-offs, and state-specific rules. Here is an overview of the primary tools.
A Medicaid Asset Protection Trust is an irrevocable trust specifically designed to protect assets, most commonly, the primary residence from Medicaid’s asset limit and estate recovery. Here is how it works:
In Connecticut, average nursing home costs exceed $15,000 per month. This means a MAPT protecting a $400,000 home saves beneficiaries approximately 26 months of care costs that would otherwise have been spent down. For a $700,000 home, the savings are proportionally larger.
Critical warning: A MAPT must be established and funded at least 5 years before you apply for Medicaid. Transfers within the lookback period are treated as gifts and create a penalty period. The time to create this trust is while you are healthy and do not foresee needing care, not when you are already in a care situation.
Many families have a revocable living trust as part of their estate plan. A revocable living trust does NOT protect assets from Medicaid. Because you can change or revoke it at any time, Medicaid counts those assets as available to you.
Only an irrevocable trust, one where you give up control of the assets, can potentially shelter them from Medicaid after the 5-year lookback period passes. This is a meaningful trade-off: you are giving up direct ownership and control over assets in exchange for protection. An experienced estate planning attorney in your state can help you evaluate whether that trade-off makes sense for your situation.
For married couples, Medicaid has specific protections designed to prevent the healthy spouse from being impoverished while the other spouse receives care. Key rules in CT and NY:
Long-term care insurance remains one of the most straightforward ways to fund care without depleting savings. Policies vary significantly in coverage, benefit periods, inflation protection, and premium costs.
The challenge: premiums are substantially lower when purchased at younger ages. A policy purchased at 55 may cost $2,000-$4,000 per year. The same policy at 65 may cost $5,000-$8,000 per year, if you are still insurable at all. Waiting until you are in your mid-60s or later significantly limits your options.
A newer option gaining traction: hybrid life insurance and long-term care policies that combine a death benefit with LTC coverage. If you never use the LTC benefit, your heirs receive the death benefit instead. These eliminate the ‘use it or lose it’ concern that discourages many people from purchasing standalone LTC policies.
Starting in 2026, SECURE 2.0 also allows individuals to withdraw up to $2,500 per year from IRAs or 401(k)s penalty-free to pay long-term care insurance premiums. Ordinary income tax still applies, but the 10% early withdrawal penalty does not.
Families often arrive at this conversation after a loved one is already in a facility or about to enter one. At that point, the full 5-year Medicaid planning strategies are off the table but options still exist:
Crisis Medicaid planning is significantly more limited and expensive than planning done five to ten years earlier. The options above are not as powerful as a properly funded irrevocable trust established well in advance. But they can make a meaningful difference when time is short.
This is important enough to say explicitly: if you have a revocable living trust, even a well-drafted one, those assets are NOT protected from nursing home costs or Medicaid spend-down.
A revocable trust is excellent for probate avoidance, privacy, and incapacity planning. It is the right tool for those purposes. But because you retain control of the assets, Medicaid treats them as fully available to you. The estate planning attorney who drafted your revocable trust almost certainly told you this but, it is a point that gets lost, and many families discover it too late.
Protecting assets from long-term care costs requires an irrevocable trust, a separate, additional legal structure. The two serve different purposes and both may be appropriate as part of a complete plan.
Even families who successfully qualify for Medicaid often do not know about Medicaid Estate Recovery. After a Medicaid recipient dies, the state has the right to seek reimbursement for benefits paid from the deceased person’s estate. In Connecticut and New York, this typically means the state can file a claim against the home if it passed through probate.
This is why a revocable living trust, even though it does not protect assets from Medicaid during your lifetime, is still valuable for Medicaid recipients. Assets held in a revocable trust bypass probate, and in most cases bypass Medicaid estate recovery as well. The combination of a Medicaid Asset Protection Trust (for assets transferred 5+ years before application) and a revocable trust (for assets that remain) can significantly reduce estate recovery exposure.
A properly structured plan layers these tools together. This is not a do-it-yourself area. The interaction between Medicaid rules, state estate recovery laws, and trust structures is state-specific and changes with legislation. Working with an attorney who is licensed in and knowledgeable about CT and NY Medicaid law specifically is essential.
These are the questions I hear most often from families starting this conversation.
| Q: Will Medicare pay for nursing home care? |
| Medicare covers skilled nursing facility care only under limited conditions. Following a qualifying hospital stay of at least three days, in a Medicare-certified facility, requiring skilled care like rehabilitation. Coverage is 100% for days 1-20, then $217/day coinsurance for days 21-100 in 2026, and nothing after day 100. Medicare does not cover custodial care ~ help with bathing, dressing, and daily activities. Which is what most people need for extended stays. Medicaid is the primary payer for long-term custodial care. |
| Q: Can I just give my house to my children to qualify for Medicaid? |
| This is the most common misconception in Medicaid planning. Transferring your home to your children within five years of applying for Medicaid creates a penalty period of ineligibility. The penalty is calculated based on the value of the transfer and the average nursing home cost in your area. To avoid this penalty, a transfer must happen more than five years before you apply for Medicaid. Which is why early planning is essential. Alternatively, a Medicaid Asset Protection Trust can protect the home if established at least five years before application. |
| Q: What is a Medicaid Asset Protection Trust and how does it work? |
| A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust specifically designed to protect assets from Medicaid’s spend-down requirements. You transfer assets, most commonly your home, into the trust at least five years before applying for Medicaid. After the five-year lookback period passes, those assets are no longer countable for Medicaid eligibility. You can continue living in your home; the trust can be structured to provide you with income from the assets. When you die, the assets pass to your beneficiaries protected from Medicaid estate recovery. The key requirement: the trust must be properly structured by an attorney familiar with Medicaid rules in your state, and it must be funded at least five years before you need Medicaid. |
| Q: Does a revocable living trust protect my assets from nursing home costs? |
| No. A revocable living trust does not protect assets from Medicaid. Because you retain full control of the assets, you can change or dissolve the trust at any time. Medicaid counts them as available to you. A revocable living trust is an excellent tool for probate avoidance, privacy, and incapacity planning, but it does not shelter assets from Medicaid spend-down. An irrevocable trust specifically structured for Medicaid planning (a MAPT) is the tool that provides Medicaid protection, and it requires giving up control of the assets. |
| Q: What is the Medicaid 5-year lookback period? |
| The Medicaid 5-year lookback is a review the state conducts of all your financial transactions for the 60 months prior to your application for Medicaid long-term care. Any assets transferred for less than fair market value during that window. Gifts to children, transfers into irrevocable trusts, donations, or assets sold below market value, create a penalty period of Medicaid ineligibility. The length of the penalty depends on the amount transferred and the average nursing home cost in your area. The only way to avoid this penalty is to complete transfers more than five years before applying. |
| Q: My spouse needs nursing home care. Will I lose everything? |
| No, Medicaid has specific protections for the healthy spouse (called the community spouse). In Connecticut in 2026, the community spouse can retain up to $162,660 of the couple’s combined assets, the primary residence in many cases, one vehicle, and household furnishings. Income protections also apply. These are called the Community Spouse Resource Allowance and Minimum Monthly Maintenance Needs Allowance. A Medicaid planning attorney can help structure your assets to maximize what the community spouse retains while qualifying the institutionalized spouse for benefits. |
| Q: What is changing with Medicaid under the new federal law? |
| The One Big Beautiful Bill Act (OBBBA), signed in 2025, included approximately $1 trillion in Medicaid cuts over 10 years. The most significant change for long-term care planning is a $1 million cap on home equity for Medicaid long-term care eligibility, effective January 1, 2028. In Connecticut and New York, where homes frequently exceed $500,000-$1 million, this could disqualify families who previously relied on their home as an exempt asset. Additionally, New York implemented a 30-month lookback for community-based (home care) Medicaid services starting March 2025, significantly tightening NY home care planning. The window to complete planning before these changes fully take effect is narrowing. |
Long-term care is the financial risk most families underestimate until it arrives. At $114,975 per year nationally (and significantly more in CT and NY), four years of nursing home care can eliminate a lifetime of savings in roughly the same time it takes a Medicaid Asset Protection Trust to clear the lookback period.
The families who navigate this well all share one thing: they started the conversation years before care was needed. That is not because they were pessimistic. It is because they understood that the tools available: irrevocable trusts, Medicaid planning strategies, long-term care insurance, require time to work properly.
The families who call us after a parent is already in a facility have far fewer options than the families who called us five years earlier. The best time to do this planning was five years ago. The second-best time is now.
| Ready to Build a Long-Term Care Protection Strategy? Davenport & Associates and John F. Davenport, Esq. is licensed in both New York and Connecticut. He helps CT and NY families coordinate Medicaid planning, irrevocable trusts, and long-term care strategies as part of a complete estate plan. Free 15-minute consultation. -> Book Your Free Review -> jdavenportassociates.com/contact-us |
| References & Sources CareScout Cost of Care Survey 2025 (semi-private nursing home national median $114,975/yr), carescout.com A Place for Mom 2026 Costs of Long-Term Care Report (assisted living national median $74,400/yr), aplaceformom.com AARP Public Policy Institute Long-Term Care Affordability Report, March 2026, aarp.org Connecticut Medicaid Eligibility 2026, medicaidplanningassistance.org/medicaid-eligibility-connecticut New York Medicaid 5-Year Lookback & 30-Month Community Medicaid Lookback, alatsaslawfirm.com, ricafortelaw.com Medicaid Asset Protection Trusts: Connecticut, Brown Paindiris & Scott, LLP, bpslawyers.com Medicaid 5-Year Lookback Rules, medicaidlongtermcare.org One Big Beautiful Bill Act, Medicaid and Long-Term Care Provisions, Laiderman Law Firm; RKPT.com SECURE 2.0 Act , $2,500 LTC Insurance Withdrawal Exception, Old Colony Law, oldcolonylaw.com Community Spouse Resource Allowance 2026, $162,660, medicaidplanningassistance.org |
| About the Author | John F. Davenport, Esq. John F. Davenport holds a law degree from Pace University, an MBA in finance from Fordham University and undergraduate degree from the University of Notre Dame. He is a licensed attorney in New York and Connecticut, and holds FINRA Series 6, 7, 63, and 65 licenses. He founded Davenport & Associates in 1997 and has spent more than 30 years helping CT and NY locally and families across the country build retirement income plans and estate strategies that work together, not against each other. Davenport & Associates is located at 800 Connecticut Avenue, Suite E401, Norwalk, CT 06854. Phone: (203) 853-6300 | jdavenportassociates.com IMPORTANT DISCLAIMER: Educational only—not investment/tax/legal advice. No strategy guarantees results—vary by rates, markets, laws, personal circumstances. Consult advisors. |