What the Medicaid Cuts Mean for Your Family and Why You Can’t Wait to Plan

If you’ve been watching the news and wondering whether any of it actually affects you, this one does.
The legislation passed in 2025 — widely referred to as the “One Big Beautiful Bill” — included sweeping cuts to Medicaid that are now taking effect. For millions of American families, especially those planning for long-term care, the impact is real and the window to act is narrowing.

What Changed with Medicaid

Medicaid has long been the primary way Americans fund nursing home and long-term care. It covers roughly two-thirds of all nursing home residents nationwide. When families think they’re “too comfortable” financially to qualify, they often find out otherwise — after they’ve already spent down their savings trying to pay for care.

The 2025 cuts reduced retroactive eligibility coverage from 90 days to just 30 days. That change alone can cost families tens of thousands of dollars if a care need arises before a Medicaid application is fully processed. Other provisions tighten income and asset limits, add new procedural hurdles, and reduce federal funding to states — some of which will inevitably pass those reductions on through narrower eligibility or reduced covered services.

For families already navigating a parent’s declining health, that’s a smaller safety net at exactly the wrong time.

The Cost of Care Is Already Staggering

Even before factoring in the policy changes, long-term care costs in 2026 are at levels most families aren’t prepared for.

A private room in a nursing home now averages over $135,000 a year. A semi-private room runs about $118,000. Assisted living — often the starting point for families trying to balance care and affordability — has climbed to $74,400 annually, after a 5% increase in the past year alone.

Home care costs have followed the same trajectory. Nursing home care in high-cost states like Alaska can exceed $30,000 per month. Even in moderate-cost markets, $10,000 a month has become a baseline, not an outlier.

Most retirement savings were never meant to absorb costs like that — not for a year, and certainly not for the two, five, or ten years some families will need.

Where People Get Stuck

The most common misconception is that Medicaid planning is only for people with very little money. That’s not true, and it’s an expensive belief to hold.

Medicaid has strict asset and income thresholds, but there are legal planning strategies that allow families to protect what they’ve built — a home, a retirement account, money meant for a spouse or children — while still qualifying for benefits. The key is that these strategies take time to execute properly. Medicaid’s look-back period means transfers and asset repositioning done too close to a care event can trigger penalties or delays in coverage.

Families who wait until a health crisis to start planning often find their options are much narrower. Those who plan ahead, even a few years out, typically have far more flexibility.

What Medicaid Planning Actually Involves

Medicaid planning is not one-size-fits-all. It depends on your state of residence (Medicaid rules vary significantly), your household situation, what assets you’re trying to protect, whether you or your spouse has a service-connected disability or veteran status, and how close to care you realistically are.

At Burgos & Brein, we look at the full picture. That includes reviewing retirement accounts, real estate, insurance policies, and any existing benefits you may already be entitled to — like VA Aid & Attendance, which can provide up to $3,845 per month for qualifying veteran households toward long-term care. Many of our clients are surprised to discover they qualify for more than they realized, or that combining VA benefits with Medicaid planning opens doors that neither approach would alone.

The goal is always to build a plan that makes sense for your specific situation — one that protects your assets, makes care affordable, and doesn’t leave your spouse or children in a difficult position.

This Year Is a Particularly Important Time to Plan

A few factors make mid-2026 a meaningful moment to start or revisit long-term care planning.

The Medicaid changes are still recent. Some provisions are still being interpreted at the state level. Families who plan now, before eligibility windows narrow further, are in a better position than those who wait for the landscape to settle. The policy environment suggests further pressure on public benefit programs, not less.

At the same time, care costs keep climbing. Every year of delay is another year of potential exposure. And the earlier planning begins, the more options are on the table — whether that’s asset protection strategies, long-term care insurance review, or getting a VA benefit application started for a qualifying veteran or surviving spouse.

Take the First Step

A free consultation with Burgos & Brein is a no-obligation conversation about your situation. We’ll tell you honestly what options exist, what the timeline looks like, and what makes sense to do now versus later. We work with families nationwide and have helped clients across every stage of retirement planning — from early preparation to urgent care transitions.

866-949-7675 | BurgosandBrein.com | Info@BurgosandBrein.com

There’s no cost to ask the question. And the cost of not asking it keeps going up.