Medicaid — not Medicare — is the primary payer of long-term care in the United States. Medicare covers short-term skilled rehab; the bill for ongoing nursing-home care, memory care, or in-home support past that window is paid by your parent’s savings, long-term-care insurance, or the state Medicaid program. In New Jersey, that program is NJ FamilyCare, with long-term-care services delivered through Managed Long-Term Services and Supports (MLTSS)— a fully integrated managed-care system unique among large states in its scope.1

Three eligibility tests, in order

1. Clinical eligibility

NJ requires applicants for MLTSS to meet a nursing-facility level of care, determined through a clinical assessment. Office of Community Choice Options (OCCO) clinical assessors evaluate activities of daily living, cognitive status, and medical complexity. The assessment is required for both nursing-facility placement and home and community-based services through MLTSS.2

Schedule the OCCO assessment early; wait times vary by region. For families anticipating that a parent may need care, getting the clinical eligibility established before the financial spend-down is complete is a common strategic move.

2. Income

NJ applies the federal categorical income standard: gross monthly income at or below 300% of the federal benefit rate (approximately $2,829/month in 2026). Income above the cap doesn’t automatically disqualify the applicant — a Qualified Income Trust (QIT), sometimes called a Miller trust, allows above-cap income to be diverted into a trust each month so it doesn’t count toward eligibility.3

3. Assets

The applicant’s countable assets must be at or below $2,000 at the moment of application. A number of categories are exempt:

Not counted (in most cases):

Counted:

The five-year look-back, in plain English

NJ reviews any transfer of assets for less than fair market value made during the 60 months before the Medicaid application. Uncompensated transfers trigger a penalty period— a window during which your parent is otherwise eligible but Medicaid won’t pay. The penalty math is straightforward: the value of the transfer divided by NJ’s penalty divisor (approximately $13,000/month). A $50,000 gift produces roughly a 3.8-month penalty. The penalty clock does not start until your parent is otherwise eligible— meaning they’ve spent down and are in care. So the penalty hits precisely when the family most needs Medicaid to pay.4

The five MCOs that actually run your parent’s coverage

After Medicaid LTC eligibility is established, your parent enrolls with one of five managed-care organizations:

The MCO coordinates all care: in-home services through contracted home-health agencies, adult day services, assisted- living personal-care components, nursing-facility care, care transitions, durable medical equipment. The MCO assigns a care manager who is the family’s primary point of contact. Provider networks vary across MCOs; before enrollment, confirm that your parent’s current providers (PCP, specialists, preferred facilities) are in the selected MCO’s network.5

The community-spouse situation

If one spouse needs care and the other doesn’t, federal spousal-protection rules apply. The well spouse (the “community spouse”) keeps:

Most one-spouse-needs-care situations can be planned to a non-catastrophic outcome with 12–24 months of lead time. Talk to a NJ elder-law attorney before doing anything unilateral — DIY in this scenario is where the most expensive mistakes happen.

Personal Preference Program (PPP) — paid family caregiving through MLTSS

Once enrolled in MLTSS, the recipient can elect Personal Preference Program (PPP)self-directed services. PPP allows the recipient to hire and pay a personal-care provider — including an adult child — instead of receiving services through an agency-employed aide. The MCO authorizes a monthly cash allocation (based on assessed needs) that the recipient uses to pay the chosen caregiver. Spouses generally cannot be paid under PPP. Rates vary by MCO but typically run $14–$22/ hour in 2026.

PPP is particularly valuable when a family member is already providing meaningful care — it converts that informal arrangement into legitimate, documented employment that doesn’t trigger Medicaid look-back issues.

When to start planning

The honest answer: as soon as you see meaningful decline. The look-back math — spend-down on exempt assets, certain trust structures, spousal allowance optimization — works well at the five-year mark and progressively worse closer to application. That doesn’t mean it’s ever too late; plenty of families plan in the final 12–18 months and improve the outcome. But the toolkit narrows.

What to do this month

For the broader Medicaid context, see our Medicaid pillar overview. For NJ estate planning that intersects with Medicaid and the NJ inheritance tax, see Legal & Financial in NJ.