The Michigan Department of Health and Human Services (MDHHS) is the department of the State of Michigan that processes Medicaid applications to help pay for long-term care in a nursing home. MDHHS has recently proposed a significant change to Medicaid eligibility for elderly applicants. This policy change would raise the asset limit from $2,000 to $9,430, potentially letting more seniors qualify for Medicaid coverage. As an elder law attorney, I believe this development, if enacted, will have positive implications for many Michigan seniors and their families.

Key Points of the Proposed Change

1. Asset Limit Increase: The proposed policy would more than quadruple the current asset limit, from $2,000 to $9,430. The limit has been $2,000 for decades.
2. Potential Impact: This change could make Medicaid coverage accessible to a larger number of elderly Michigan residents.
3. Timing: As of now, this is a proposed policy change, so it is not yet known if it will take effect. However, the tentative effective date is February 1, 2025.

What This Means for Michigan Seniors

The proposed increase in the Medicaid asset limit could be a game-changer for many elderly individuals in Michigan. Here's why:

1. Increased Eligibility: More seniors may qualify for Medicaid coverage, potentially easing the financial burden of long-term care costs.
2. Less Spend-Down Required: With a higher asset limit, seniors may not need to "spend down" their assets as drastically to qualify for Medicaid.
3. Greater Financial Flexibility: The increased limit could let seniors retain more of their savings while still accessing necessary care. $2,000 does not last long, especially when most of a single Medicaid applicant's income has to be paid as the Medicaid co-pay (the patient pay amount). 

Planning Considerations

While this proposed change is promising, Medicaid planning remains complex. Here are some factors to consider:

1. Income Limits: The income limits for Medicaid eligibility are separate from asset limits and still apply.
2. Look-Back Period: The five-year look-back period for asset transfers remains in effect.
3. Individual Circumstances: Each person's situation is unique, and professional guidance is important in navigating Medicaid planning.

Next Steps

As we await further details and potential implementation of this policy change, it's essential to stay informed and prepared. Consider the following:

1. Stay Updated: Keep an eye on official announcements from the MDHHS regarding this policy change.
2. Pending Medicaid Applications: If you have already applied for Medicaid and your application is still pending or if you are about to apply for Medicaid, you have to comply with the current rules, which include the $2,000.00 countable asset that has been in place for decades. Remember, the potential increase is just a proposal at this point.
3. Seek Professional Advice: Consult with an experienced elder law attorney to understand how the Medicaid rules affect your specific situation. Even if the asset limit is raised to $9,430, there are other legal Medicaid planning techniques we can use to save more. For single people, we can usually save at least half of the countable assets at risk. For married couples, we usually can save all of the countable assets at risk. Remember, DHHS will not inform you of that or help you with it (that's like asking the IRS to do your taxes).

The proposed increase in the Medicaid asset limit for elderly applicants is a significant development in Michigan elder law. While it offers potential benefits, it's crucial to approach Medicaid planning holistically, considering all aspects of your financial and healthcare needs. As always, professional guidance is key to navigating these complex issues effectively.

I, Andrew Byers, am an estate planning and elder law attorney in Troy, Michigan with 28 years of practical experience you can use to for your benefit. Contact me now by using the online form or call me directly at (248) 469-4261. On this free initial call, I will answer your preliminary questions and get some background information to make sure it is a situation I can help with. After that, you can decide if it makes sense to schedule a more in-depth consultation. I advise clients in Troy, Michigan and surrounding areas including Royal Oak, Clawson, and the rest of Metro Detroit.