Michigan Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: January 25, 2023

 

Michigan Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income families and individuals of all ages. While there are several different coverage groups, the focus of this page is long-term care Medicaid eligibility for elderly Michigan residents who are 65 years of age and older. In addition to care services in nursing homes, assisted living facilities, and adult foster care homes, MI Medicaid pays for non-medical services and supports to help frail seniors remain living in their homes. There are three categories of Medicaid long-term care programs for which Michigan seniors may be eligible.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Medicaid Waivers / Home and Community Based Services – These are not entitlement programs; there are a limited number of participants and waiting lists may exist. Benefits are intended to delay nursing home admissions and may be provided at home, adult day care, adult foster care, or in assisted living. More on Waivers.

3) Regular Medicaid / Aged Blind and Disabled – This is an entitlement program; meeting the eligibility requirements ensures one will receive assistance. Various long-term care services, such as personal care assistance or adult day care, may be available.

In Michigan, Medicaid is often called Medical Assistance (MA). While Medicaid is jointly funded by the state and federal government, it is administered by the state under federally set parameters. The Michigan Department of Human Services is the administering agency.

  The American Council on Aging now offers a free, quick and easy Medicaid Eligibility Test for seniors.

 

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have varying financial and medical eligibility criteria. Further complicating financial eligibility are the facts that the criteria change annually, vary given one is single or married, and that Michigan offers multiple pathways towards eligibility.

 Simplified Eligibility Criteria: Single Applicant for Nursing Home Care
Michigan seniors must be financially and medically eligible for long-term care Medicaid. They must have limited income, limited assets, and a medical need for care. A single individual applying for Nursing Home Medicaid in 2023 in MI must meet the following criteria: 1) Have income under $2,742 / month 2) Have assets under $2,000 3) Require the level of care provided in a nursing home facility.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from a MI Medicaid program. Alternatively, one can take the Medicaid Eligibility Test. IMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medical Assistance in Michigan. More.

2023 Michigan Medicaid Long-Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,742 / month* $2,000 Nursing Facility $2,742 / month per spouse* $3,000 Nursing Facility $2,742 / month for applicant* $2,000 for applicant & $148,620 for non-applicant Nursing Facility
Medicaid Waivers / Home and Community Based Services $2,742 / month† $2,000 Nursing Facility $2,742 / month per spouse† $3,000 Nursing Facility $2,742 / month for applicant† $2,000 for applicant & $148,620 for non-applicant Nursing Facility
Regular Medicaid / Aged Blind and Disabled $1,215 / month $2,000 Help with ADLs $1,643 / month $3,000 Help with ADLs $1,643 / month $3,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $60.00 / month, Medicare premiums, and possibly a spousal income allowance for a non-applicant spouse, must go towards nursing home costs.
†Based on one’s living settings, one may not be able to keep monthly income up to this level.

 

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards Medicaid’s income limit. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, stock dividends, and Veteran’s benefits with the exception of Aid & Attendance or Housebound pension. Holocaust restitution payments are also considered non-countable income.

Treatment of Income for a Couple
When only one spouse of a married couple applies for home and community based services via a Medicaid Waiver or for Medicaid nursing home care, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded and does not impact the income eligibility of their spouse. The non-applicant spouse, however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is a Spousal Impoverishment Rule and is the minimum amount of monthly income a non-applicant spouse is said to require to avoid impoverishment.

The MMMNA is $2,288.75 (eff. 7/1/22 – 6/30/23). If a non-applicant’s monthly income falls under $2,288.75, income can be transferred to them from their applicant spouse, bringing their income up to this level. In Michigan, a non-applicant spouse can further increase their spousal income allowance if their housing and utility costs exceed a “shelter standard” of $686.63 / month (eff. 7/1/22 – 6/30/23). However, in 2023, a spousal income allowance cannot push a non-applicant’s total income over $3,715 / month. This is the Maximum Monthly Maintenance Needs Allowance. More on how the spousal income allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; the income of both the applicant spouse and the non-applicant spouse is calculated towards the applicant’s income eligibility. Furthermore, there is no Monthly Maintenance Needs Allowance for a non-applicant spouse. More on how Medicaid counts income.

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets are added together and count towards Medicaid’s asset limit. This includes cash, stocks, bonds, investments, IRAs, bank accounts (credit union, savings, and checking), any remaining funds from Covid-19 stimulus checks, and real estate in which one does not reside. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, and generally one’s primary home.

Home Exemption Rules
The home is exempt if the Medicaid applicant resides in it or has Intent to Return, and in 2023, their home equity interest is no more than $688,000. Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of the home’s equity that is owned by the applicant. If a non-applicant spouse lives in the home, it is automatically exempt regardless of any other circumstances.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Michigan’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. However, Spousal Impoverishment Rules permit the non-applicant spouse of a Nursing Home Medicaid or Medicaid Waiver applicant a Community Spouse Resource Allowance (CSRA). In 2023, the community spouse (the non-applicant spouse) can retain 50% of the couple’s assets, up to a maximum of $148,620. If the non-applicant’s half of the assets falls under $29,724, 100% of the assets, up to $29,724 can be retained by the community spouse.

Medicaid’s Look-Back Rule
It is important that one does not give away assets or sell them under fair market value within 60-months of applying for Nursing Home Medicaid or a Medicaid Waiver. This is because Michigan’s Medicaid agency will assume it was done in order to reach the Medicaid asset limit. Violating Medicaid’s 5-Year Look-Back Rule results in a Penalty Period of Medicaid disqualification. The Look-Back Rule does not apply to Regular Medicaid.

Persons sometimes mistakenly think that the U.S. Federal Gift Tax Rule extends to Medicaid eligibility. This rule, in 2023, allows individuals to gift up to $17,000 per recipient without filing a gift tax return. Gifting under the Gift Tax Rule violates Medicaid’s Look-Back Period.

 

Medical / Functional Need Requirements

To be eligible for long-term care Medicaid, an applicant must have a medical need for such care. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, some program benefits may require additional criteria be met. For instance, for home modifications, an inability to live independently without the modifications may be necessary. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NFLOC is not necessarily required.

 

Qualifying When Over the Limits

For Michigan residents who are 65 years of age and over who do not meet the financial eligibility requirements above, there are other ways to qualify for Medicaid.

1) Medically Needy Pathway – Michigan has a Medicaid Spend-down program that allows seniors who have income over Medicaid’s limit to become income-eligible by “spending down” their income on medical expenses and care services. In 2023, the Medically Needy Income Limit (MNIL) in MI is $1,215 / month for an individual and $1,643 / month for a couple. The “spend down” amount is the difference between one’s monthly income and the MNIL. This can be thought of as a deductible. Once one has met their spend down, they will be income-eligible for Medicaid services for the remainder of the month. Please note that the MNIL’s for nursing home care differ from the figures listed above. Instead, the income limit for “spend down” in a nursing home is facility-specific. The medically needy pathway also has an asset limit of $2,000 for an individual and $3,000 for a couple.

2) Asset Spend Down – Persons who have countable assets over Medicaid’s limit can still become asset-eligible by spending down extra assets on non-countable ones. Examples include home repair (fixing a leaking roof), home modifications (addition of wheelchair ramps or walk-in tubs), and paying off debt. Remember, assets cannot be gifted or sold under fair market value. Doing so violates Medicaid’s Look-Back Rule. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

Persons who have assets over Medicaid’s limit can still qualify by spending down extra assets on non-countable ones. Examples include home repair (fixing a leaking roof), home modifications (addition of wheelchair ramps or walk-in tubs), and paying off debt. Remember, assets cannot be gifted or sold under fair market value. Doing so violates Medicaid’s look back rule. It is recommended one keep documentation of how assets were spent as proof the look back rule was not violated.

 Our MI Medicaid Spend Down Calculator can assist persons in determining if they might have an asset spend down, and if so, provide an estimate of the amount. 

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of care. For these persons, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

 

Specific Michigan Medicaid Programs

In addition to paying for nursing home care, MI Medicaid / Medical Assistance offers the following programs relevant to the elderly that helps them to remain living at home or in the community.

1) MI Choice Waiver Program – This “HCBS Waiver” for the elderly and disabled provides supportive services to help nursing home qualified persons avoid nursing home placement. It includes benefits such as adult day care, home modifications to enable aging in place, respite care, independent living skills training, and many other supports. Enrollment is limited.

2) MI Health Link – Through this managed care program for persons who are dually eligible for Medicaid and Medicare, a variety of supportive services are available to promote independent living. Benefits may include personal care assistance, meal delivery, chore services, and personal emergency response systems. This is not a statewide program.

3) Home Help Program – This is the formal name for a benefit under the state’s Regular Medicaid program. It is an entitlement for those who are qualified and provides for personal care, laundry, and housekeeping in one’s home.

4) Program of All-Inclusive Care for the Elderly (PACE) – The benefits of Medicaid, including long-term care services, and Medicare are combined into one program. Additional benefits, such as dental and eye care, may be available.

 

How to Apply for Michigan Medicaid

Elderly residents of Michigan should contact their Michigan Department of Health & Human Services county office to apply for Medicaid / Medical assistance. To locate your local office and to obtain contact information, click here. Seniors can also contact their local Area Agency on Aging office for Medicaid program information or to request application assistance. Currently, there is not an online option for applying for long-term care Medicaid.

When applying for Medicaid in Michigan, it is extremely important that seniors are certain that they meet all of the eligibility criteria, as discussed in detail above. If one has income and / or assets over the limit(s), or are unclear as to whether the requirements are met, Medicaid planning becomes crucial. Applying for Medicaid can be complicated and time consuming, and if the application is completed incorrectly and all required documentation is not provided, Medicaid benefits may be denied or delayed. Learn more about applying for long-term care Medicaid.

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