Brief Overview of Medicaid

by Casey David Conklin on Feb. 23, 2018

Health Care Medicare & Medicaid   General Practice Estate 

Summary: A brief overview of Medicaid by Donald J. Baranski



When Medicaid recipient dies:


Half the median value of the homes in the County goes to family.




Spouse                         1.         Community spouse lives in house


Children                       2.         Minor children or handicapped child lives in home


Family Member           3.         Family member lives in home who cared for Medicaid recipient for at

Cared For                                least 2 years before Medicaid recipient entered long term care.


Sibling Lived in           4.         Sibling of Medicaid recipient has joint ownership, has lived there for

In House 1 year                       at least 1 year before the Medicaid recipient entered a nursing home.

Joint ownership


Livelihood                   5.         Home contributes to livelihood such as a farm.


Poverty                                    6.         Taking home would cause person living there to be reduced to poverty.


Not Worth Expense    7.         Taking home cost State more than it is worth.


            When exemption no longer applies, person living there dies or house is sold, Medicaid will enforce the claim.


            Community spouse is allowed $2,030.00 per month in 2017.


            If necessary, Medicaid recipient’s income can be transferred to community spouse to void the $2,030.00 per month.


            If living costs are higher, the community spouse can go to court to get up to $3,022.50 per month.




How it Works


            Earn month all of Medicaid recipients income is paid to nursing home.  Less any assets transfer to community spouse, recipient and health insurance, less $60.00 for Medicaid recipient’s expense such as haircut, clothes and miscellaneous.






Example:                     Medicaid Recipient receives $2,000 per month all sources minus $200 per  (Spouse gets                    month to community spouse to get up to $2,030.00

$1,766 per month)



                                                   500 – Health Insurance


 60 – Expenses

                                                1,240 to Nursing Home







            Community spouse first $24,180.00 in month assets.  Half of assets over $24,180.00 up to $120,900.00.  Anything over, to Medicaid recipient’s card.


Example:                     Marital asset $350,000






Max:                            $325,820                     Half - $325,820.00 divided by 2 = $162,910.00




Spouse Keeps:                           $24,180




Medicaid Receives:      $204,920


Does not matter which spouse’s name is on asset, Medicaid claims if married.




  1. Principal Residences.
  2. Automobile used for transportation by recipient or household member for recipient.
  3. Prepaid Funeral
  4. Life insurance max value $1,500
  5. $2,000 other assets, e.g. bank account



            DIVESTMENT Definition.  Transfer of asset whether by sole or gift less than fair market value.  Include family gift, charitable or political contributions or sale of an asset.


            BEFORE 2007, penalty to divestment outside of a trust 3 years, and 5 years to asset held in a trust.  Transfer was date of transfer.  NOW, no matter trust or not, all 5 years, from date application was filed.


            (If principal have in a trust must be removed from trust before Medicaid will approve application).  The amount divested is divided by daily rate of the long-term care facility, and NOT rounded down.  (Loans made during 5 year look back period care allowed as long as there is a payment schedule and the loan is not forgiven in long term resident’s Last Will and Testament.


            Annuities must be irrevocable and non-assignable.  Payment must be made in equal installments and no balloon payments.


            Payment must be made for recipient’s long-term care, or to the spouse.


            If spouse is the beneficiary, the State must be named after the spouse for repayment of Medicaid to the extend owed.


            Before 2/8/2006, annuities must name Medicaid unless a spouse.  If term is not met, annuity must be cashed out to pay for long term care.


            Assets in a Truss in a Trust.  Assets must be used before Medicaid will start paying.  Exception is if Trustee is not allowed to use trust assets for Medicaid recipient expenses.  If principal residence is in a trust, it must be removed before Medicaid will approve application.


            Principal Residence does not have to be sold so long as there is a possibility the long-term care resident might return home.


            Medicaid does not allow a long-term resident to pay taxes, utilities, or upkeep on the home.  It can be rented at Fair Market Value with any profit to be paid to Nursing Home.


ALIVE - If home is sold while recipient is still alive, cash received is an asset to pay for Medicaid recipient’s care.


DECEASED - If home is sold after Medicaid recipient dies, the family is allowed to keep half of median price of home in the County.


LADY BIRD DEED – Primary residence can be deeded within 5 years without being a divestment because owner returns control over the property.  Grantor names the person(s) who will own the property after Grantor dies but Grantor returns the right to sell or refinance the property and keep the proceed while alive.


MICHIGAN RECOVERY ACT.  Medicaid file a claim against Probate Estate.  If asset in trust, Trustee must pay to Personal Rep funds for Medicaid.  Trust/Probate must notify creditors.


Medicaid Approval


            Payment can go back 3 months if application is filed by the last day of the month.




HEADSTONES – No charge.  Service members who die on active duty and for eligible Veterans.  Also, for spouse, dependent buried in state or national cemeteries but not private cemeteries.


            Free shipping on Headstone but not pay for placement.


PRESIDENTIAL MEMORIAL CERTIFICATE – Signed by the President to recognize military service of honorably discharged deceased Veteran.


            No time limit but request should have a copy (not original) of deceased Veteran’s discharge document DD-214.




  1. Veterans during War time or after 1/31/1955


  1. Veterans entitled to retired pay for service in the reserves if over age 60.


  1. Members or former Members of Selective Reserve who served their initial obligation




            Were discharged for a disability incurred or aggravated in line of duty or died while a member of Selective Reserve.









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