Mediciad Surplus Rules Explained
Medicaid surplus rules are difficult to navigate and for good reason. Most people only need to learn about them once. Whether you need to qualify for Medicaid immediately or you are planning for your future, we want to make things easier. This article will help explain the most important rules you should know about Medicaid surplus.
A Brief Overview of Medicaid Surplus
To qualify for Medicaid, seniors must meet specific financial and non-financial criteria. Throughout the post, we are going to focus on the financial requirements. Additionally, your income must be under a certain limit and anything above that limit is considered a ‘surplus.’ Individuals may fall under upwards of a dozen categories and the amount of income counted, as well as who’s income is counted (such as a spouse) will vary depending on the category you are in.
Asset Limits to Qualify for Medicaid
When you have too many resources (or assets) it’s considered Medicaid surplus. In other words, you have too much money and you have to ‘spend down’ assets before you will be eligible for Medicaid coverage. In Michigan, your asset limit is $2000. The following assets are exempt from this limit:
Furniture, clothing and other personal items required for daily life activities.
One vehicle of any make or model.
Pre-paid funeral funds and burial funds.
A house if the applicant intends to return or if a spouse or disabled child lives in the house. As long as the home is valued at $500,000 or lower it will be exempt.
You may have $2,000 in cash.
What Happens to a Spouse Under Medicaid Surplus?
It’s not uncommon that one spouse will require long-term care while the other spouse lives at home. Because of this, spousal impoverishment standards have been established so the spouse living at home does not become destitute. That spouse is allowed the following:
An allowance that is 50% of other ‘countable assets.’
Their own retirement accounts.
Just meeting the above asset requirements does not automatically qualify you for Medicaid. Most seniors have monthly income to cover their expenses and there are specific limits an individual must also meet prior to getting Mediciad. As mentioned earlier, there are different categories an individual can fall into that are greater than the scope of this article. We recommend meeting with a senior planning specialist or elder law attorney to get the most accurate information on income requirements.
Does this mean individuals who achieve higher monthly income cannot qualify for Medicaid?
No. You may still qualify but you may be assessed a deductible before benefits kick in.
Spending Down the Medicaid Surplus
Seniors who’s income is too high must use a deductible Medicaid plan. This works similar to car insurance where a portion of long-term care is covered under Medicaid and another portion is covered by the individual receiving benefits.
For example, if your income is $3200 and the limit is $2000, you must spend the extra $1,200 on medical bills (or nursing home care) before Medicaid covers the rest.
Everything covered in this article is a small portion of a large legal web. Nursing homes and Medicaid agencies do not have lawyers to interpret the law in your favor. Prior to making arrangements, we recommend
For more information: Contact Senior Care of Michigan below to speak with a Senior Planning Expert.