Medicaid in Michigan can help to financially support someone living in a number of different care settings including assisted living. However, Medicaid has particular eligibility rules for assisted living. Also, assisted living facilities are increasingly creating their own requirements for when residents can pursue Medicaid. These challenges make navigating Medicaid and assisted living very difficult.
If you or a family member anticipate needing to apply for Medicaid in an assisted living facility, these are some of the key issues to keep in mind:
- Facility Requirements. Medicaid isn’t an option at all assisted living facilities. In fact, many don’t accept Medicaid at all. For this reason, you should be careful about selecting an assisted living facility and evaluating whether your spouse or family member may need to apply for Medicaid in the future. Also, more and more assisted living facilities are requiring residents to pay the full market rate for a period of time (i.e. one year) before applying for Medicaid. As a result, it’s important you or your family member have enough resources to pay for this period of time. Lastly, when your spouse or family member qualifies for Medicaid, it’s critical to recognize that the program only pays for the “care” portion of the monthly assisted living cost. Residents with modest income may not be able cover the room and board expense. If this is the case, you should check with the assisted living facility to find out if they’ll accept your spouse or family member’s income even thought it doesn’t pay the room and board cost.
- Income Eligibility Rules. Medicaid has different income eligibility rules for assisted living. In 2023, a person cannot have more than $2,742 of monthly income and qualify for Medicaid in assisted living. For this reason, understanding what constitutes “income” and how it’s calculated is very important. Under the Medicaid rules, income includes Social Security, a pension, certain types of annuity income, and rental income. Also, this calculation is just based on the person who is applying. In other words, it doesn’t include a spouse’s income as well. Finally, income is calculated on a gross basis. This means that the Medicare premium must be added to the Social Security amount that’s deposited into your spouse or family member’s bank account. Likewise, if taxes are withheld from a pension, they must be added back to determine income under the Medicaid rules. Unfortunately, if your spouse or family member’s income exceeds the 2023 monthly cap of $2,742, there are no options to qualify for Medicaid in assisted living. In other words, your spouse or family member wouldn’t be able to qualify for Medicaid until he or she was in a nursing home.
- Asset Eligibility Rules. Fortunately, the asset eligibility rules for assisted living are the same as other care settings including nursing homes. For a married couple, this would be at most $148,620 of countable assets in 2023. However, the amount could be much less depending on the couple’s countable assets (i.e. assets other than their house and vehicle). For an unmarried person, the limit is only $2,000 of countable assets. Unlike the income eligibility rules though, there are planning options to protect more than the amounts mentioned above. Because of the modest asset rules and assisted living facilities requiring a person to pay for a certain period of time out-of-pocket, it’s important to be proactive about planning to protect your assets.
If you have any questions about Medicaid and assisted living, feel free to contact me at phmulder@cunninghamdalman.com.
