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Estate Recovery May Affect More Than Your Home

The rules and requirements for Medicaid eligibility for nursing home care are somewhat complicated and are changing each and every year. With that said, here’s a general, simplified rundown of what it takes to qualify, along with some Michigan Medicaid resources you can turn to for help.

Medicaid Rules

Medicaid, the federal and state joint program that covers health care for the poor, is also the largest single payer of America’s nursing home bills for seniors who don’t have the resources to pay for their own care.  Most people who enter nursing homes don’t qualify for Medicaid at first. They either pay for care through long-term care insurance or they pay out-of-pocket until they deplete their savings and become eligible for Medicaid.

To qualify for Medicaid, your income and assets will need to be under a certain level that’s determined by your state. The State of Michigan requires that a person have no more than about $2,000 in countable assets that include cash, savings, investments or other financial resources that can be turned into cash.

Assets that aren’t counted for eligibility include your home, your personal possessions and household goods, one vehicle, prepaid funeral plans and a very small amount of life insurance.

But be aware that, while your home is not considered a countable asset to determine your eligibility, Michigan has adopted the Estate Recovery Law. Therefore, if you can’t return to your home, Medicaid can go after the proceeds of your house to help reimburse your nursing home costs, unless your spouse or a dependent relative lives there. In other words, the probate assets of the Medicaid recipient will be exposed to estate recovery.

After qualifying for Medicaid, all sources of your income such as Social Security and pension checks must be turned over to Medicaid to pay for your care, except for a small personal needs allowance of $60.00 per month.

You also need to be aware that you can’t give away your assets in order to qualify for Medicaid faster. Medicaid officials will look at your financial records going back five years to root out suspicious asset transfers. If they find one, your Medicaid coverage will be delayed a certain length of time, according to a formula that divides the transfer amount by the average monthly cost of nursing home care in your state.

So if, for example, in Michigan, you gave away cash or other assets worth $150,000, you would be ineligible for Medicaid benefits for 21 months ($150,000 divided by $7,032 = 21).

All this being said, there remain many opportunities to plan for Medicaid - even if you or a loved one are in the midst of a difficult medical and financial crisis.

It is of utmost importance, however, that you consult with an experienced Elder Law attorney that specializes in Medicaid planning BEFORE filing for any benefits. There are mistakes in Medicaid planning that you want to avoid.  The Michigan Elder Law attorneys at The Elder Law Firm PC would be happy to meet with your family in your home or skilled nursing facility anywhere in Michigan to discuss how we can help you pay for your nursing home care without impoverishing yourself or your spouse.

Please call our office toll-free at (616) 840-3754 to schedule a free, no-obligation Michigan Medicaid Planning consultation.