Get Specific Information Regarding Michigan Medicaid Regulations
Although Congress and the Federal Centers for Medicare and Medicaid Services (CMS) set out the main rules under which Medicaid operates, Michigan, like every other state manages its own program through it Department of Human Services (DHS) and regulations can and do differ from state to state. Failing to meet each and every Michigan Medicaid specification will mean failure to qualify. Any month in which you fail to qualify will not be paid by Michigan Medicaid.
Gather Information Regarding Every Asset that You Own
Exempt assets include the homestead (to a maximum equity value of $500,000, a vehicle, prepaid funeral arrangements and life insurance with a face value of less than $1,500. These do not count when totally up your assets total for Michigan Medicaid purposes.
All other assets owned by the individual are "countable assets" and an individual applicant for Michigan Medicaid is permitted a maximum of $2,000. Any amount over $2,000 will disqualify a patient of a nursing home for Medicaid in Michigan.
Patient Pay Amount
Michigan Medicaid Program assumes that your entire income, except for amounts paid for your own health insurance and $60 per month for your personal needs will be used to pay for the costs of your nursing home care. This means, of course that there is no money left to pay for the upkeep of the home or vehicle that the individual is permitted to keep.
Divestment or Giving Away Assets
Assets that have been "divested" or given away to anyone other than a spouse or disabled child will create a penalty period during which Medicaid will not pay for nursing home care for an individual who has otherwise qualified. Michigan Medicaid assesses a one-month penalty period for each $6362 that was divested in the past five years. This penalty does not begin to run until the individual is in the nursing home and has qualified for Medicaid by having no more than $2,000 in assets.
Management of the Penalty period
A divestment creates a penalty period in which the individual must use his income and the $2,000 assets he is permitted to keep to pay for his nursing-home care. Careful calculations can permit an arrangement to give away some money and use other personal funds to create a short-term stream of income with special loans or annuities so that the individual can manage to pay for his own care during the penalty period. Only very specific types of contracts are acceptable for Michigan Medicaid and you will need to use a reliable resource to help you in this planning.
Seek the Advice of an Experienced Medicaid Planning or Elder Law Attorney
An attorney, well versed in Michigan Medicaid regulations can make sure that you meet the qualifications and preserve as much of your assets as possible. Short-term loans, which pay back over the period of the penalty or annuities, which pay over the months of the penalty, can be arranged with organizations that have developed financial instruments specifically designed to qualify for Michigan Medicaid.