Michigan Medicaid Spend Down

Medicaid is a governmental program that can help pay nursing home care in Michigan, but there is a catch.  That catch is that there is an asset test.  A single individual can only have $2,000 in countable resources.  Countable resources are everything, except for:

  • Primary Residence
  • Small Cash Value of Life Insurance
  • An Automobile
  • Pre-Paid Funeral
  • Personal Belongings.


Everything else is countable.  If you are a married couple, they make you cut your assets in half, at most you may keep roughly $120,000 in assets.  To get to those asset limits some families engage in the nursing home spend down or Medicaid spend down.

This post will show an example of a nursing home or Medicaid spend down, but understand a Medicaid planning lawyer or more specifically a Certified Elder Law Attorney, can help your family avoid the spend down, but using crisis planning strategies like a half-loaf Medicaid plan, where half of the asset can be protected.

An Example of a Nursing Home Medicaid Spend Down

Let’s assume husband and wife, and wife needs care at $10,500 per month.

Medicaid has an asset test, where if you have more than $2,000 for a single individual or more than $24,700 for a married couple you are not going to qualify and will have to spend-down.  For a married couple, if you have more than $24,700 you will need to cut your assets in half before you can qualify.

Let’s assume that  wife has $70,000 in an insurance product (most likely an annuity).  This will have to be cashed out and placed in husband’s name, and in this situation, I would recommend in checking/savings.

Your protected about, assuming $70,000 of assets would be $35,000.  From here, you would need to spend the other $35,000 before Medicaid would kick in.

What you could do is:

  • Pay $9,000 in credit card debt.
  • Pay up to $10,000 for an irrevocable funeral contract (2x$10,000= $2,000)
  • The remaining balance could be used to make purchases of items you may want or need.
  • Anything else can be paid to the nursing home.


Once below the protected amount, you can submit a Medicaid application.  The nursing home social workers should be able to assist you.

Learn More Medicaid Planning Strategies

Learn more about Medicaid and how to avoid the nursing home or Medicaid spend down by attending one of our Clarity Builder Workshops ™ where we discuss long-term care, taxes, Medicaid and Probate.

Call our office at (888) 390-4360 or sign up online at www.estateworkshop.com

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