Medicaid Planning Attorney in Detroit

Michigan Medicaid Eligibility: What You Need to Know

Michigan Medicaid covers nursing home care, assisted living, and in-home care for individuals who meet income and asset criteria. Medicare is frequently misunderstood here: it doesn’t cover long-term custodial nursing home care beyond an initial skilled nursing benefit period, typically limited to 100 days under qualifying conditions. Families relying on Medicare for extended nursing home stays often encounter unexpected bills.

Applicants are subject to a 60-month look-back period during which MDHHS reviews asset transfers. Transfers made to reduce countable assets within that five-year window can result in a penalty period of ineligibility. During that period, Medicaid won’t pay for nursing home care even if all other criteria are met. Understanding what counts as a transfer, and what doesn’t, requires careful legal review before any action is taken.

Exempt vs. Countable Assets

Michigan distinguishes between exempt and countable assets when reviewing eligibility.

• Exempt assets generally include the primary residence, one vehicle, personal property, household goods, and a prepaid funeral contract
• Countable assets include savings accounts, CDs, IRAs, additional real estate, stocks, bonds, and most other liquid or investable assets

For a single applicant, Michigan’s Medicaid asset limit is currently approximately $9,950, though this figure is subject to annual adjustment. Confirm the current limit with an attorney before planning around it. For married couples, the community spouse resource allowance permits the at-home spouse to retain a portion of the couple’s combined countable assets, while the nursing home spouse must spend down to the applicable limit.

Common Medicaid Planning Tools in Michigan

Several legal instruments can help Michigan families protect assets and preserve eligibility. Each has specific timing requirements and limitations, which is why legal guidance before acting matters.

Medicaid Asset Protection Trust (MAPT)
A MAPT is an irrevocable trust that, once funded and outside the look-back window, can shield assets, including the home, from being counted toward Medicaid eligibility. Because the trust is irrevocable, the grantor gives up direct control of the transferred assets, making early planning essential.

Lady Bird Deed
A Lady Bird Deed, also called an enhanced life estate deed, allows a Michigan homeowner to retain full control of their home during their lifetime while transferring it to named beneficiaries at death. Because the home passes outside of probate, it’s generally not subject to Michigan’s estate recovery program, which can be an important consideration for families with a primary residence.

Spend-Down Planning
Spend-down planning involves converting countable assets into exempt assets or qualifying expenditures in a legally permissible way before or during the application process. Done correctly, this can reduce countable assets without triggering a penalty period. Done incorrectly, it can delay eligibility significantly.

Which tools make sense depends on the applicant’s marital status, asset composition, health status, and how much time remains before a nursing home admission is expected. Our attorneys can help identify the right approach for each client’s specific circumstances.