Understanding the Private Pay “Spend-Down” Before Medicaid in New Jersey

One of the most confusing, and stressful, realities families face when a loved one needs long-term care in New Jersey is the private pay period before Medicaid begins. I see this every day in my work, and too often families are blindsided by costs they didn’t anticipate or rules they didn’t fully understand.

Here’s the truth: Medicaid does not step in immediately. Before benefits begin, individuals must meet strict financial and medical eligibility requirements. That usually means paying for care out of pocket until assets are reduced to Medicaid’s limits. This is commonly referred to as the “spend-down” or private pay period.  Each community has their own requirements, with some asking for a two year spend down, while others ask for three.

For families, this can feel overwhelming. Senior living in New Jersey is expensive, and without a clear plan, savings can disappear quickly. What makes this even more complicated is Medicaid’s five-year look-back rule, which reviews past financial transactions. Gifts or asset transfers made during that time can trigger penalty periods where Medicaid still won’t pay, even after funds are spent down.

This is where planning and guidance matters.

At Santoro Senior Strategies, my goal is to help families understand the system before they’re in crisis; and to guide them through it when they already are. I work closely with elder care attorneys and trust & estate professionals to ensure every piece of the plan is aligned.

An elder care attorney is essential for navigating Medicaid rules, protecting a spouse at home, handling asset transfers properly, and avoiding costly mistakes. Trust managers and financial professionals help structure assets responsibly and ensure funds are used in ways that support long-term stability, not just short-term survival.

My role is to connect the dots:

• Helping families understand what Medicaid will and won’t cover

• Preparing them for the private pay period so there are no surprises

• Coordinating with legal and financial professionals to build a compliant, ethical plan

• Advocating for seniors so their dignity, care, and financial well-being are protected

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Most importantly, I help families slow things down, get educated, and make informed decisions before the home transition, instead of reacting under pressure.

If you or someone you love is facing long-term care decisions, know this: you don’t have to navigate Medicaid, private pay, attorneys, and financial planning alone. With the right team and the right strategy, it is possible to protect assets, preserve peace of mind, and ensure quality care.

That’s why I do this work and why I’m here to help.  Call me, Jen Santoro at (908-328-9290), and let’s talk!  We can create a short-term plan together which can carry over to a long-term solution.