As a general rule of thumb, the income limit for long-term care Medicaid (HCBS waivers and nursing home Medicaid) is 300% of the Federal Benefit Rate (FBR). As of 2020, this equals $2,349 / month for a single applicant. Please note that the income limit for state Medicaid is lower, and as of 2020, is 100% of the Federal Poverty Level (FPL), which equals $1,063 / month. That said, being over the income limit is not automatic cause for Medicaid ineligibility, as Michigan has a medically needy pathway. Simply put, applicants who have high recurring medical and care expenses in relation to their income are able to spend their excess income on these costs. Once they have “spent down” their income to the income limit, they will be income eligible for the remainder of the medically needy period.
A second “test” is made, which considers the applicant’s financial resources. Seniors are permitted up to $2,000 in resources, as well as a home (limited to an equity interest value of $595,000 in 2020), household items, a single vehicle, and personal effects. Should an applicant’s resources exceed the allowable limit, they will be asked to spend-down their resources on their care costs until they meet the limit. That said, it is vital that one does not give away cash and valuables in order to meet the asset limit. Doing so may violate Medicaid’s 5-year look-back period and can result in a period of Medicaid ineligibility.
Married applicants (nursing home care or Medicaid waiver) with non-applicant spouses, also called community spouses, are able to transfer a portion of their income (up to $3,216 / month in 2020) to their non-applicant spouses. This is called the monthly maintenance needs allowance and is permitted if non-applicant spouses do not have sufficient income in which to live. There is also a community spouse resource allowance that enables non-applicant spouses to keep up to $128,640 (in 2020) in joint assets.
Persons unsure about their eligibility or have income and / or assets over the eligibility limit, should consult with a Medicaid planning professional before they submit their Medicaid application and associated paperwork.
