Michigan Medicaid Nursing Home Eligibility Information & Rules For 2018 Last Updated April 02, 2018
|Michigan Medicaid Eligibility Information 2018|
|Medicaid Eligibility Requirement||Single||Married|
|2018 Michigan Medicaid Income Limits||$Medical Spend Down Allowed||$Medical Spend Down Allowed|
|2018 Michigan Medicaid Asset Limits||$2,000||$4,000|
|2018 Michigan Medicaid Home Equity Limit||$572,000||$572,000|
Overview of Medicaid for Long-Term Care in Michigan
The cost of senior care is a concern many individuals as they age. Many wonder how they will afford long-term care services once they can no longer care for themselves independently. For thousands of low-income and medically needy seniors in Michigan, Medicaid is a viable option to make long-term care more easily accessible.
Long-term care is an expensive investment, with nursing homes, in-home care services, and assisted living facilities having a median cost of $21,500 - $103,295 per year in Michigan. To offset some of these costs, Medicaid offers coverage for certain types of long-term care for those who financially and medically qualify.
Those who prefer to receive long-term care services in their home may qualify for coverage through one of Michigan’s Medicaid Waivers. Participants of Medicaid Waiver programs may qualify to receive alternative types of long-term care to help them age in place and avoid being institutionalized.
Medicaid is funded jointly by Michigan state and the Federal government. Michigan’s Medicaid program must operate within the federal government’s guidelines, however the state may make their own decisions within the federal rules.
The Federal government pays the largest portion of Michigan’s Medicaid budget by far, and is responsible for 73.1% of the state’s Medicaid funding. The state government funds the remaining 26.9% of Michigan’s Medicaid budget.
A person may be eligible to receive Medicaid for long-term care in Michigan if they are:
- At least 65 years of age, or are disabled
- Receive Supplemental Security Income (SSI)
- Require a nursing home level of care
- Meet Medicaid’s financial requirements or express willingness to participate in a spend down program
Michigan Medicaid Programs for Long-Term Care
Michigan (MI) Choice Waiver Program
In the past, nursing homes were the only choice for seniors requiring long-term care. However, present-day seniors may prefer community-based care in their home or in an assisted living facility to receive their care. For low-income seniors who prefer community-based care to a standard nursing facility, the Michigan (MI) Choice Waiver Program may allow them to receive coverage for such services through Medicaid.
The MI Choice Waiver Program began in 1992 as the Home and Community-Based Service (HCBS) Waiver for the Elderly and Disabled. Individuals who meet the waiver’s requirements may qualify to receive Medicaid coverage for long-term care in their home or another residential setting.
Recipients of the MI Choice Waiver receive the basics benefits covered by Medicaid, in addition to benefits which allow them to receive services in their own home, including:
- Transition services
- Community living supports
- Nursing assistance and preventive nursing
- Adult Day Care
- Respite Care
- Home modifications
- Housekeeping services
- Durable medical equipment
- Home delivered meals
- Emergency response systems
The MI Choice Waiver Program is operated by the local Area Agencies on Aging (AAA). To learn more about the MI Choice Waiver, applicants should find their local AAA and contact them for more information.
Michigan Home Help Program
Seniors who prefer to age-in-place and receive care services in their own home may consider the Michigan Home Help Program, which operates similarly to the MI Choice Waiver. Seniors who require assistance with their activities of daily living may participate in the Home Help Program to receive Medicaid coverage for in-home personal care and housekeeping services.
Individuals who currently reside in nursing homes may not qualify for the Home Help Program. The program is designed to help seniors remain in their private residences for as long as possible without being institutionalized, therefore a nursing home resident may not use the program to relocate from their facility into a residential setting.
The Home Help Program operates using Michigan’s Cash and Counseling model, allowing participants to select their caregivers. They may select anyone to provide their care, including family members or close friends. The person who is selected to provide care may be paid for their services through the Home Help Program, although they may not be paid as much as a caretaker working for a facility. However much a caretaker is paid depends on the county in which they provide service.
To qualify for the Michigan Home Help Program, a person must require an institutional level of care as determined by a health assessment, and they must be able to live safely in a residential environment with the amount of assistance and supervision they expect to receive. If the person requires a nursing home level of round-the-clock supervision, they may not qualify to receive benefits through the Home Help Program.
Additionally, an applicant must meet the asset and income requirements for Medicaid to qualify for the Home Help Program.
Program of All-Inclusive Care for the Elderly (PACE)
The Program of All-Inclusive Care for the Elderly (PACE) allows seniors to receive comprehensive medical care, which includes coverage for long-term care services and residential-based care. A person who receives the MI Choice Waiver or benefits through the Home Help Program may not qualify to receive benefits through PACE in Michigan.
If a person over the age of 55 qualifies as “frail” and requires a nursing home level of long-term care, they may be able to receive combined Medicare and Medicaid benefits through PACE in Michigan. The program will pay for a person’s home-based long-term care if they live in a geographic area serviced by PACE, and if they meet Medicaid’s medical and financial criteria.
Additionally, a person must have the ability to live safely in a residential environment as they receive care. Applicants who require the round-the-clock care they may only access at a nursing home may not qualify to receive benefits through PACE.
What Long-Term Care Services Does Medicaid Cover in Michigan?
To receive nursing home coverage through Medicaid, a person must medically require the services they request. A person may qualify for Medicaid coverage of nursing homes if their health assessment indicates they require a nursing home level of care to live safely and perform their activities of daily living.
Additionally, an applicant must retain no more than $2,000 in countable assets to financially qualify for benefits. For a person to receive full Medicaid coverage of nursing homes, they must not earn more than 133% of the Federal Poverty Limit (FPL). If an applicant earns more than this limit, they may still qualify to receive nursing home coverage through Medicaid if they participate in a spend down program.
Regardless of a person’s eligibility, Medicaid will not pay for room and board at a nursing home. They may only cover additional services a person requires during their stay, like professional therapies or medication administration. Each Medicaid applicant is responsible for their own room and board.
Assisted Living Facilities
Medicaid will not pay for assisted living facilities in Michigan, however they may pay for the additional services a person receives at one. If a person qualifies for the MI Choice Waiver, their Medicaid benefits may cover their services at an assisted living facility, but it will not pay for the facility stay itself. Typically, the services a person receives at an assisted living facility are bundled with the cost of their room and board, meaning most applicants do not use Medicaid coverage to pay for assisted living in Michigan.
In-Home Care Services
Seniors who prefer to receive long-term care in their home as opposed to in a facility may qualify to receive home-based service coverage through Medicaid. To receive in-home care services through Medicaid, a person must qualify for the MI Choice Waiver Program, the Home Help Program, or PACE. Participants of these programs are eligible to receive home-based care through Medicaid, and may choose to use their benefits for in-home care as an alternative to facility-based services.
Michigan Medicaid Eligibility Requirements
Because Medicaid for long-term care is designed for low-income seniors requiring care, applicants must meet certain medical and financial eligibility requirements to receive benefits. Seniors oftentimes admit themselves to long-term care facilities without a doctor’s orders, and Medicaid will not step in for such situations. For Medicaid to cover a person’s nursing facility or in-home care costs, the person must medically require the services to maintain their health and wellbeing, and they must not have the financial resources to pay for their care without assistance. A person who does not meet Medicaid for long-term care’s financial requirements may still qualify to receive benefits if their health meets the program’s criteria, however a person who does not medically require long-term care may not receive Medicaid coverage regardless of their financial position.
Medicaid will pay for a person to live in a nursing home if it is medically necessary for them to receive healthcare services in a long-term care facility. To meet Michigan’s health criteria and qualify for facility-based care through Medicaid, a person must require a nursing home level of care as determined by a health assessment.
Prior to enrollment in any of Michigan’s Medicaid for long-term care programs (Michigan Health Link, Michigan Choice, and PACE), an applicant must undergo an assessment provided by the nursing facility of their choice to determine their level of care. The assessor will address any daily issues the person encounters as they complete tasks, and will determine if they physically or mentally require a nursing home to protect their health.
The majority of applicants in Michigan qualify for Medicaid because they experience difficulty completing their activities of daily living (ADLs). A person’s ADLS include dressing, bathing, eating, cooking, using the restroom, and maintaining personal hygiene.
When the assessor evaluates the applicant’s ability to perform their ADLs, they will record the level of assistance the person requires to best determine if they require a nursing home level of care. The assessor will rate the person’s self-performance of ADLs as follows:
- Independent (the person can complete the activity without assistance)
- Requires Supervision (the person requires some supervision to complete the activity)
- Limited Assistance (the person is highly involved in completing the activity, but requires some help)
- Extensive Assistance (the person can complete part of the activity themselves, but they largely rely on help)
- Total Dependence (the person cannot complete any part of the activity and they require total assistance)
There are no set requirements for how many ADLs a person must require assistance with to require a nursing home level of care, as the assessor takes each individual ADL into consideration to determine if a person requires nursing home services. However, a person who is totally dependent on care for two or more ADLs will generally qualify.
In addition to a person’s self-performance of their ADLs, a person’s cognitive performance, health stability, existing conditions and required treatments, required rehabilitation therapies, and general behavior may play a role in determining their level of care. For example, a person may have the ability to self-perform each of their ADLs without assistance, but they may require a nursing home level of care because they wander and put themselves at risk. Seniors who wander may get lost or injure themselves without supervision, therefore they may require a nursing home to help them live safely.
After a person’s care provider assesses them, the assessor must complete a Level of Care Determination Form and submit it to Medicaid. The form must be completed and submitted within 14 calendar days of the applicant’s start date to receive benefits. If a person does not require a nursing home level of care as determined by their health assessment, they may repeal the determination and create a case for why they believe they medically require long-term care. A person who successfully repeals their determination may be eligible to receive Medicaid benefits.
Asset Requirements & Limits
Michigan Medicaid for long-term care will evaluate a person’s finances to determine if they qualify to receive benefits. Medicaid divides a person’s financial resources into two categories: assets and income. Each category is subject to its own limits, which a person must fall within if they wish to receive Medicaid benefits.
A person’s assets include their physical property and their existing monetary funds (like money in a checking or savings account). Medicaid generally considers vehicles, homes, stocks, bonds, and annuities as assets.
In Michigan, Medicaid for long-term care applicants are subject to a $2,000 asset limit. Medicaid expects applicants with more than $2,000 in assets to put their excess resources toward their care before they may receive benefits. For example, a person with $4,500 in assets may not qualify for Medicaid, however they may become eligible if they liquidate $2,500 worth of their assets and use the proceeds to pay for their care.
Although most assets are taken into consideration, Medicaid does make exceptions for certain types of bank accounts and properties. If an asset’s value is counted toward a person’s asset limit, Medicaid considers it a countable resource. Assets which are not counted toward the resource limit are considered “exempt assets,” and they will not impact a person’s financial eligibility to receive Medicaid.
Generally, a person’s most important assets are protected from Medicaid. For example, Medicaid will not count the value of a person’s primary residence toward their asset limit if it is worth fewer than $572,000 (Michigan’s Home Equity Limit). The home will remain exempt as long as the applicant does not move away without an intent to return, or if the applicant’s spouse continues to use the home as a primary residence after their spouse moves into a care facility.
If a home’s value exceeds the Home Equity Limit, Medicaid may count the excess value toward an applicant’s asset limit. The applicant may need to liquidate their home or allow Medicaid to place a lien on its value to qualify for benefits. Applicants who own more than one residence may only keep one as exempt, and any additional properties will qualify as additional properties.
Additionally, a person may retain one vehicle without impacting their asset limit. The applicant does not need to have their driver’s license or use the vehicle as a primary means of transportation for it to qualify as exempt, and the vehicle is not subject to a value limit. It may be an automobile, a motorcycle, a truck or a boat - there are no restrictions on the type of vehicle a Medicaid applicant may retain. If a person owns more than one vehicle, the vehicle with the highest value will be excluded from consideration, and the others will count toward their asset limit.
A married person may keep more than one vehicle if they use their primary vehicle to transport themselves to and from medical appointments, and their spouse requires an additional means of transportation to attend their own obligations (like a job or their own medical appointments). In addition, a person may keep any vehicles which are modified to accommodate a disability, regardless of the vehicle’s value.
Although most types of bank accounts classify as countable assets, burial accounts and end-of-life expense accounts do not. If a person has an irrevocable prepaid funeral contract to pay for their funeral services, Medicaid will not count it toward a person’s asset limit if its value does not exceed $11,393. For such an account to qualify as exempt, an applicant must complete an Irrevocable Funeral Contract Certification and submit it to Medicaid to verify their exemption.
Additionally, a person may retain one revocable burial account if they have clearly designated the funds to pay for their funeral services. The account may not have a value of more than $1,500 to qualify as exempt.
In Michigan, retirement accounts are not protected, and may impact a person’s eligibility to receive benefits. Medicaid in Michigan expects seniors to use their retirement funds to pay for their long-term care, and does not consider IRAs, 401(k)s, or any other type retirement account as exempt.
If a married person applies to receive Medicaid benefits for long-term care and their spouse does not, they may be able to retain additional assets without disqualifying themselves from coverage. The spouse who does not apply for benefits is known as the “community spouse,” and a community spouse is entitled to keep a portion of the couple’s resources as their own to protect them from spousal impoverishment. In Michigan, a community spouse may keep up to $123,600 worth of exempt assets without impacting their spouse’s eligibility - this is known as the Community Spouse Resource Allowance (CSRA).
In addition to a maximum value of assets, community spouses are expected to keep a minimum of $24,720 to provide for themselves as their spouse receives care. If the community spouse does not have at least $24,720 in assets to retain as their half of the couple’s resources, their spouse may transfer a portion of their half to make up the difference.
For example, a couple with $30,000 in combined assets may keep $15,000 each as their portion when Medicaid evaluates their resources. Because $15,000 is fewer than $24,720, the institutionalized spouse may transfer $9,720 to their spouse. These assets will remain exempt as part of the CSRA, and will not impact the institutionalized spouse’s financial eligibility to receive benefits.
Income Requirements & Limits
Medicaid considers a person’s monthly income in addition to their assets when they evaluate their financial eligibility to receive benefits. Similarly to assets, Medicaid considers the source of a person’s income, and considers some sources as exempt income and others as non-exempt. However, unlike assets, Medicaid in Michigan does not put a cap on how much income a person can earn to receive benefits. If a person does not fall within Medicaid’s income requirements, they may “spend down” on their care to receive long-term care benefits if they require a nursing home level of care.
When Medicaid determines a person’s income, they use their Modified Adjusted Gross Income (MAGI) figure as opposed to their gross or net income. The MAGI allows Medicaid to get a more accurate look at how much income a person earns each month, and how qualified the person is to pay for their own care with their monthly income. A person’s Adjusted Gross Income (AGI) is combined with their foreign income and any withdrawals they make from their retirement account to create their MAGI.
The income requirements in Michigan are determined by the Federal Poverty Level (FPL), which changes annually. In 2018, the FPL is $750 per month. For a person to receive full Medicaid benefits in Michigan, they must earn no more than 133% of the FPL - in 2018, this is $997.50. If a person receives SSI benefits, they may automatically qualify to receive Medicaid for long-term care, regardless of their other sources of income.
Married applicants are subject to different limits than single applicants. When one spouse applies for benefits and the other does not, the community spouse may retain a portion of the couple’s income to provide for themselves as their partner receives care. This amount is known as the Minimum Monthly Needs Allowance (MMNA), and it protects seniors from impoverishment when their spouse receives care.
Community spouses in Michigan are allowed to keep up to $3,090 per month free from Medicaid’s consideration. They are expected to retain no less than $2,030 per month as their MMNA. If a community spouse does not earn at least $2,030 per month, the institutionalized spouse may retain an additional portion of their income without impacting their Medicaid eligible. The institutionalized spouse may keep enough income to make up the difference between their spouse’s income and the MMNA. For example, an institutionalized spouse may retain an additional $1,030 in exempt assets if their spouse only earns $1,000 per month.
If an applicant’s income does exceed the FPL, they may still receive Medicaid benefits by qualifying as “medically needy.” When a person qualifies as medically needy, it means their income does not fall below the FPL, but they do not have enough resources to pay for their care without assistance. In such situations, the person may pay into Medicaid similarly to a private insurance provider, and receive coverage for long-term care.
When a person pays into Medicaid, it’s known as a “spend down” period. Each month, the person is required to use their income to pay for their care until they fall within Medicaid’s medically needy income limit ($903 for single applicants and $1,250 for married couples). Additionally, they must meet Medicaid’s asset limits, and my not retain more than $2,000 in countable resources to qualify.
For example, a single applicant makes $1,500 per month. To qualify as medically needy, they must spend at least $597 on their care costs each month before Medicaid will provide any coverage. There are no limits on how much a person can make to qualify as medically needy in Michigan; if a person can spend enough of their income on their care to fall within Medicaid’s medically needy income limit, they can qualify to receive benefits.
Planning for Medicaid in Michigan
To improve their chances of qualifying for Medicaid, it’s not uncommon for seniors to transfer their assets without compensation prior to applying for benefits. By transferring their assets without remuneration, some seniors believe they can reduce their equity value and essentially trick Medicaid’s system for determining who financially qualifies to receive benefits. As a result, Medicaid has implemented a system of checks and balances to deter applicants from forging their eligibility.
When an applicant issues a transfer without receiving any goods, services, or funds in return, Medicaid considers the transfer a gift. Gifts can negatively impact a person’s eligibility to receive benefits, and may delay when a person’s coverage begins.
Medicaid considers any gift transferred without compensation as an effort to mislead them about the applicant’s finances. Therefore, any gifts a person transfers may subject them to a penalty, regardless of their value. Fortunately, there are several ways seniors can make protected transfers without incurring penalties or disqualifying themselves from receiving benefits, making it important for seniors to plan for Medicaid before they apply.
Caregiver agreements are one way seniors may transfer assets without incurring penalties from Medicaid. A caregiver agreement is signed by two people, wherein one party agrees to provide a service for the other, and the second party agrees to pay them for their assistance. Medicaid applicants may sign a caregiver agreement with anyone, regardless of their relationship. When two people sign a caregiver agreement, the funds transfer no longer qualifies as uncompensated and thus Medicaid does not classify it as a gift.
There are few limits as to which services a caregiver agreement may cover. Anything from personal care to transportation may be protected. The person receiving the care may not pay the caregiver more than a reasonable amount for the service being provided, and the caregiver agreement may only apply to services which have yet to occur.
For example, a person’s daughter intends to drive her mother to a doctor’s appointment. The mother wishes to pay her daughter $50 for the ride. Each party signs a caregiver agreement which states the mother will pay the daughter $50 for a ride to a medical appointment, and Medicaid may no longer consider the transfer a gift.
Lady Bird Deeds
In Michigan, applicants are subject to Medicaid Real Estate Recovery, meaning Medicaid may take a person’s property after they pass away, regardless of the home’s status as exempt during their time as a beneficiary. For seniors who wish to leave their home to another family member or close friend post-mortem, Michigan Medicaid Real Estate Recovery may prevent them from doing so if they do not take precautionary action.
Medicaid may only take a person’s home if it is transferred through probate. Transfers which avoid probate are not at risk of Medicaid’s involvement, regardless of any claims Medicaid has on the property's value.
Lady Bird Deeds are one option seniors have to protect their home from Medicaid after their death. By signing a Lady Bird Deed, the homeowner may transfer their home directly to another person without probate. When a person uses a Lady Bird Deed, Medicaid cannot step in and the home cannot be recovered for its value.
Medicaid Penalties in Michigan
Seniors in Michigan who give their assets away without compensation prior to applying for Medicaid may be subject to penalties in accordance with the value of their uncompensated transfers. Each Medicaid applicant is subject to a look back period of five years prior to when they apply for benefits, to reveal any gifts they may have given during that time
If Medicaid discovers any gifts during the person’s look back period, they will assign a penalty period. Michigan uses the average monthly nursing home cost as the divisor to determine how long a person’s penalty will last. Currently, the divisor is $8,261. Medicaid takes the combined value of a person’s uncompensated asset transfers and divides it by this number to determine how long they will wait until they step in and provide coverage to the individual.
Long-Term Care Partnership Program
Between the ages of 40-70, a person may purchase long-term care insurance to plan for their future. Long-term care insurance will pay for a portion of an individual’s cost of long-term care, depending on their policy and the services they require. In Michigan, seniors with a long-term care insurance policy may also qualify to receive benefits through Medicaid if they participate in the Long-Term Care Partnership Program (LTCP).
The LTCP allows seniors who own long-term care insurance to receive Medicaid benefits if their medical bills are high enough to offset their assets and income. Medicaid increases an applicant’s resource allowance using an “asset disregard” method, which allows seniors to convert a portion of their countable assets into exempt assets in accordance with their long-term care insurance policy.
For example, a person’s long-term care insurance policy pays $50,000 toward their nursing home. Medicaid will allow the individual to retain an additional $50,000 in exempt assets without disqualifying themselves from receiving benefits.
How Does Medicaid Work With Medicare in Michigan?
Medicare beneficiaries are not automatically disqualified from receiving Medicaid benefits in Michigan. If a person owns a Medicare plan but financial and medically qualifies for Medicaid, they may receive benefits from both programs to pay for their long-term care.
If a person qualifies for both Medicare and Medicaid, they classify as “dual eligibles.” Depending on their income, a dual eligible may qualify for the Medicare Savings Program, which aims to make long-term care more affordable to those who participate in both Medicare and Medicaid.
The Medicare Savings Program allows participants to use their Medicaid benefits to pay for their Medicare premiums, copayments, and deductibles. The amount Medicaid will cover depends on the applicant’s income, and those with low-income may qualify to receive the most coverage.
To qualify for the Medicare Savings Program, applicants must apply at their local Department of Human Services. The Medicare Savings Program is not entitlement-based, and each applicant who qualifies may not automatically receive benefits. To learn more, visit the Michigan Medicare Savings Program’s comprehensive brochure.
How to Apply to Medicaid in Michigan
To apply for Medicaid in Michigan, a person must submit a paper application to their local Department of Human Services (DHS) Office. Applicants may download the application online and print it off to bring or mail to the DHS Office, or they may pick up an application in person at their local DHS Office.
Married applicants must fill out an Asset Declaration Form in addition to their application to assist with their financial evaluation. Once a person delivers all of their application paperwork to their local DHS office, they will receive a notification about their eligibility within 45 days (60 days if they are disabled).