October 25, 2018
Michigan Medicaid Nursing Home Eligibility Rules
The cost of Nursing Home care in Michigan is on the rise. Clients have reported that their parents are paying $13,500 per month for care in a Nursing Home. One of the ways to help pay for this devastating cost of long-term care is to look to the Medicaid program as a way to help pay the cost of care.
Michigan Medicaid Eligibility Rules
The rules for qualifying for Medicaid can be challenging and confusing. The most problematic piece of qualify for Medicaid involves the asset test for Medicaid. Basically, a single individual can only have $2,000 of countable assets. Countable assets are everything other than:
- A home, though now a home can have a lien placed on it due to estate recovery
- Personal belongings
- Small cash value of life insurance ($1,500)
- An automobile
- Pre-paid, irrevocable final expenses
Everything else is a countable assets. Countable assets for Medicaid purposes, basically include everything else, including:
- Cash Value Life Insurance
- Second properties
- Second cars
- Your spouses assets
Now that you understand how assets are handled. It’s important to to understand how income is treated for Medicaid in a nursing home in Michigan.
Often, people assume there is an income test for Medicaid. That is true as it relates to Medicaid at home, called the MI Choice Waiver program. But, for Medicaid in the nursing home, there is no income test.
Medicaid Look-back Period in Michigan
In Michigan and every other state, there is a five year look-back period as it relates to moving money or gifting money out of a Medicaid applicant’s name. From the time of application, Medicaid will look back five years to see if any gifts were made or any money is moved around.
If you have moved any money around then you will get penalized with a divestment penalty. This divestment penalty would not allow you to receive any Medicaid benefits, even if you’d be otherwise qualified.
For example, if you have given away $80,000 in the past 5 years, then try to qualify for Medicaid, then Medicaid will divide the amount you’ve given away by the divestment penalty divisor, which is around $8,000. The result is the number of months that you need to be below $2,000 in assets, but still you will not receive any benefits. In this case, the $80,000 would be divided by $8,000 to equal 10. That 10 means that you would have to go 10 months before Medicaid would pay out any benefits. So, you’d have to be below the $2,000 asset limit, then 10 months need to expire, then Medicaid would kick in.
The worst part, Medicaid does not care why you made the gifts. So, even if you’ve gifted to help pay your grand kid’s college, Medicaid does not care. Still penalized.
Medicaid Spend-down Strategies
You don’t have to spend down all your assets to qualify for Medicaid. With a Certified Elder Law Attorney, you can create a Medicaid Crisis plan to protect at least half of your assets utilizing a Medicaid half-loaf plan.
If you are a married couple we may be able to protect more than half of your assets depending how you have them invested.
Learn More About Medicaid Eligibility in Michigan
To learn more about qualifying for Nursing Home Medicaid in Michigan, you should attend one of our upcoming Clarity Builder Workshops, to learn the ins and outs of Medicaid qualification and strategies to protect as much of your resources as possible from the devastating cost of long-term care.