f you are disabled, blind, or 65 or older, you can qualify for Medicaid if your monthly income in 2014 is $809 or less for a household of one or $192 for a couple. That is equivalent to 87% of the Federal Poverty Level (FPL).
New York’s Excess Income Program does allow individuals to qualify for Medicaid by spending down their income on qualifying medical expenses until they reach Medicaid income limits. For example, if your income is $100/month, but you spend $300/month on medical expenses, then you qualify for Medicaid because you are spending down $300 to bring you under the $809 income cap.
New York also has a program in which you can pay your extra income to the Department of Social Services in order to maintain Medicaid eligibility. In addition, New York allows individuals of any age to establish pooled income trusts to set aside excess income and still qualify for Medicaid.
If you are considering a nursing home stay, remember that New York Medicaid requires nursing home residents to contribute almost all of their monthly income to the cost of their nursing home care. The state allows Medicaid recipients in nursing homes to keep only $50 per month for themselves.
To qualify for non-MAGI Medicaid, the kind of Medicaid that will cover long-term care services, you must have few resources. Resources are assets, like money in the bank, retirement accounts, land, and personal property like cars. The resource limit for a single person to qualify for non-MAGI Medicaid is $14,550, and it is $21,450 for a married couple who both want to qualify.
Some property does not count toward the resource limit. For example, you are allowed to have up to $814,000 of equity in your home, and you are also allowed to exempt one vehicle.
And you have to be careful what question you ask here--asking if it legal to transfer funds between accounts sure it is legal to do so, but then the questions is will it disqualify them and the answer is yes.And in that case they can legally penalize the person for such a transfer.