Medicaid Long-Term Care FAQ

How Medicaid Eligibility is Determined

Eligibility for Medicaid long-term care in Michigan is determined by both financial and non-financial criteria. Financially, the applicant must pass the asset and income limit, and medically, the applicant must require a level of care typically provided in a nursing home.

Income Limit

For 2025, an individual must have a monthly income under $2,901. For married couples, the income of the non-applicant spouse is not taken into account.

Asset Limit

An individual can have up to $9,660 in countable assets, not including a primary residence, one vehicle, and personal belongings. Almost all other assets are countable.

Community Spouse Resource Allowance

If one spouse is applying for Medicaid long-term care, the other spouse may keep 50% of the couple's assets up to $157,920.

What is the "look-back" period?

The Department of Health and Human Services (DHHS) looks at each individual's countable assets at the time his or her application is filed, as well as any transfers involving their assets over a 5-year look-back period. The transfer of assets or income within that 5-year look-back period for less than fair market value is called a "divestment," and a divestment often creates penalties related to the timing of Medicaid payments. Transfers to a revocable trust or to a spouse are NOT considered divestments. A divestment penalty may be undone if all of the transferred resources are returned to the applicant or fair market value is paid before the penalty period starts.

What happens to my house if I apply for Medicaid?

• If the applicant lives in their home and the home equity interest (the amount they owe minus any outstanding mortgage/debt) is less than $730,000, then the home is exempt.
• If the applicant's spouse, minor child, or blind or disabled child of any age lives there, the home is exempt regardless of the home equity interest or where the applicant lives.
• If none of the above-mentioned people live in the home, then the applicant can file an "intent to return" home, which can also count the home as an exempt asset.

If an applicant has more assets than Medicaid allows, they can purchase or pay for the following items to decrease their assets:

• Medical expenses
• Health insurance premiums
• Personal care services
• Legal fees
• Prepaid funeral or burial expenses
• Home equity conversion
• Paying off debt
• Home items and repairs