Whether you are approaching retirement or you have concerns about aging loved ones, Medicaid planning can ensure your preparedness for future long-term care needs. Eligibility for Medicaid varies by state, so Michigan residents must review and understand these requirements.

If you or your senior parents live in Michigan, explore the 2020 eligibility laws so you can plan accordingly.

Income and asset limits

To qualify for Medicaid, a Michigan resident must be at least age 65 or blind or disabled. Individuals who do not already receive Social Security income must also fall under the maximum income and asset thresholds. For 2020, the income limit in Michigan is $2,349 per month, which represents 138% of the federal poverty level. Individuals with income exceeding this limit can sometimes qualify if they have very high medical costs.

Michigan requires residents who need nursing home care to designate most income toward the cost of that care. They can retain only $60 per month for personal needs.

Seniors seeking Medicaid qualification for long-term care can retain up to $128,640 in assets to qualify, along with a primary residence valued up to $595,000, personal property, an automobile and other exempt items.

Additional qualification strategies

Michigan allows seniors who do not meet the income limits to apply through the Medically Needy Pathway. Each month, the person will become eligible for Medicaid after spending excess income for that month on nursing home care.

If your family’s assets exceed the limit, you can “spend down” nonexempt assets such as cash, investment accounts and real estate holdings. Liquidate these assets and invest the proceeds in your exempt assets. For example, you can sell a vacation home and use the proceeds to make repairs on your primary home, modify it for aging in place or even pay off outstanding debt.

When you expect that a family member will need long-term care, plan for this eventuality as early as possible. Doing so can help make the transition more financially feasible.