Income and Asset Limits for Medicaid

Medicaid is health insurance for people with low income. In Michigan, there is traditional Medicaid (TM) and the Healthy Michigan Plan (HMP). HMP started in 2014 as part of the Affordable Care Act. To be eligible for either HMP or TM, you must meet certain income limits, asset limits, or both.

TM has many categories, or sub-programs, for eligible children, families, and adults. Each category has income limits and some have asset limits. The limits vary depending on the category. To learn more about these categories, read An Overview of Medicaid or visit “Health Care Programs Eligibility” on the Michigan Department of Health and Human Services (MDHHS) website. HMP has income limits, but no asset limits.

For general information about TM and HMP, read An Overview of Medicaid.

Income

Income is money you get. The MDHHS will look at the money you get from things like:

• Wages from your job, including self-employment
• Child support
• Disability benefits
• Unemployment

MDHHS may not count all the money you get as income. For example, if you get Supplemental Security Income (SSI), that won’t be counted.

To learn more about the specific income requirements, visit Health Care Programs Eligibility on the MDHHS website.

Modified Adjusted Gross Income (MAGI)

When determining eligibility for certain Medicaid programs, MDHHS will look at your household’s size and its Modified Adjusted Gross Income (MAGI). MAGI is often the same amount as the Internal Revenue Service’s (IRS) number for Adjusted Gross Income. MAGI is used to determine eligibility for tax credits for people who get their insurance through the insurance marketplace for HMP. MDHHS also uses MAGI when determining eligibility for certain TM categories.

Some examples of groups of people MAGI applies to are:

• Childless adults between 19 and 64
• Pregnant women
• People who are parents or are a caretaker of a dependent child (caretaker relatives)

Some examples of groups of people that MAGI does not apply to are:

• People 65 or older, blind, or disabled
• People getting long-term care (LTC) services
• People eligible for or who get Medicare

If you have concerns about how your MAGI is being calculated, you can speak with someone at the Michigan Medicare/Medicaid Assistance Program (MMAP). MMAP is a free, state-wide counseling service designed to help people with questions about health care.

Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you. Even if they are not able to represent you, they could still offer you advice and other help.

Another place where you could find help is from a local Federally Qualified Health Center (FQHC). FQHCs are community-based health care providers that get funding from the Health Resources & Services Administration (HRSA). They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.

Self-Employment and MAGI

People who are self-employed sometimes have issues with proving their income to MDHHS. Caseworkers are supposed to accept documents filed with the IRS as proof of income, such as Schedule C (Form 1040). The IRS forms for self-employed people often show a big difference between the gross income (total amount made) and net income (amount after expenses are deducted). Caseworkers are supposed to use the information without question.

Medicaid Deductible (Spend-Down)

Some people who are over the income limit but have high medical expenses may still be eligible for TM Group 2. These people are responsible for a certain amount of their medical expenses before TM will cover the rest. This is known as the Medicaid deductible, or spend-down. If you fall into this category, MDHHS will determine the amount you are responsible for each month before your TM kicks in. Eligibility is established on a monthly basis. Your coverage will begin when your bills meet or go over your deductible. Every bill you get will keep adding up until you reach your deductible amount. In some cases, if a bill goes over your deductible, your TM may cover the part that is over. If you have questions about this, you can speak with someone at MMAP.

Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you. Even if they are not able to represent you, they could still offer you advice and other help.

You can also contact a local FQHC. They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.

Some examples of charges that count towards your deductible are:

• Hospital, doctor, or clinic visit bills
• Dentist visit bills
• Cost of medical supplies and equipment
• Cost of medication
• Cost of transportation to get medical care

You will need to show proof of your medical bills to MDHHS. You must send the bills within 10 days of getting charged. Showing proof of a medical bill doesn’t mean you have to have paid it already. You will still be responsible for those charges, but they can add up to your monthly deductible before you pay for them. In fact, it is important to send in proof of a charge as soon as possible and in the order you are charged. Once MDHHS determines your eligibility for the month, it cannot be recalculated. If you don’t submit a bill until you pay for it, you might be paying for bills that MDHHS would have covered.

For example, if you go to a clinic on May 2 and you are charged $100 for the visit, you can submit that bill that day. If your deductible is $100, your Medicaid will kick in as soon as you provide proof of that bill.

Assets

Assets include cash, personal property, and real property. Real property is land and the things on it. Personal property includes investments, retirement accounts, life insurance policies, and trusts.

There is no asset limit for HMP. There is also no asset limit for TM categories for eligible children, pregnant women, and some families with minor children. Most other types of TM have asset limits.  To learn more about a specific category’s asset limits, you can speak with someone at MMAP.

Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you. Even if they are not able to represent you, they could still offer you advice and other help.

You can also contact a local FQHC. They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.

Exempt Assets

Some assets do not count towards the asset limit. These are known as exempt assets. Some examples of exempt assets are one home that you live in, household and personal items, and one vehicle. To find out what assets are exempt for your TM category, you can speak with someone at MMAP. Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

Jointly Owned Assets

Assets owned by more than one person are jointly owned. These assets could be considered “unavailable” and not counted. If you jointly own something, it will not be counted if all of these are true:

• You can’t sell or spend your share without the other owner’s consent
• The other owner is not part of your household for TM purposes
• The other owner does not agree to let you sell or spend your share of the assets

If you have questions about your assets, contact your local MDHHS office. Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

Divestments

A divestment is any transfer of income or an asset for less than its fair market value (less than what it is worth). In other words, if you give property to someone for free or for much less than it’s worth, it is a divestment. If you get certain TM services and you divest property, you can be penalized. Only people getting the following will be penalized for a divestment:

• LTC
• Home help services
• Home health services
• The Waiver Program

There is no minimum value of a transfer to be labeled a divestment. If the transfer happens it is a divestment, and the amount transferred does not matter. If MDHHS finds that you divested property, there will be a penalty period during which you won’t get your benefits. However, you will not lose eligibility.

If a person getting services, or their spouse, transferred income or assets, MDHHS will decide if it is a divestment. MDHHS will look at when they made the transfer and whether the transfer for less than fair market value (less than what it is worth).

Transfer Date

MDHHS uses a “look back period” to examine transfers. The look back period starts the first date the person is eligible for TM and one of the services listed above. This is known as the baseline date. From that date, MDHHS will look back 60 months (5 years) at all transfers, all the way back to February 8, 2006 if needed.

Transfers Not Labeled as Divestments

There are certain transfers that MDHHS won’t label as divestments. These types of transfers can be complicated. Here are some examples:

• An income transfer that is not countable income for SSI related to TM
• A transfer from one spouse to another, or a transfer solely for the benefit of the spouse not getting one of the services listed above
• A transfer to a blind or disabled child, regardless of that child’s age
• A transfer totally for a purpose other than to be or stay eligible for TM

There are other types of transfers that MDHHS will not label as divestments not listed here. If you have questions about whether MDHHS will count a transfer as a divestment, you can speak with someone at MMAP. Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

You can also contact a local FQHC. They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.

The Penalty Period

The penalty period is determined using the value of divestment and average monthly cost of private long-term care. Once the penalty period is over, you should start getting your benefits again.

Determining the penalty period can be complex. If you have questions, you can speak with someone at MMAP. Your local legal services may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

Freedom to Work: Working and Getting Medicaid

The Freedom to Work law allows people with disabilities to get TM Group 1 coverage while working. To be eligible, you must meet these requirements:

• Be disabled according to Social Security Administration standards
• Have a job
• Be a Michigan resident
• Have a Social Security number
• Be a U.S. citizen or an immigrant with a specific status
• Report certain information to MDHHS
• Apply for any state or federal benefits for which you could be eligible

There is an asset limit and income limit. If you earn a substantial income from work, you may have to pay a premium (monthly payment) on your coverage. The premium amount increases the more money you make.

To learn more, you can speak with someone at MMAP. Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

You can also contact a local FQHC. They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.

Disabled Adult Children

Some disabled adult children (DAC) are eligible for TM if they meet certain requirements. In order to be eligible, they must:

• Be at least 18 years old
• Have received SSI in the past but stopped getting it because they became eligible for DAC Retirement, Survivors, and Disability Insurance (RSDI) benefits
• Be eligible for SSI if not for the RSDI benefits

To learn more, you can speak with someone at MMAP. Your local legal services office may also be able to help you. Use the Guide to Legal Help to find a legal services office near you.

You can also contact a local FQHC. They often have patient advocates who can help answer questions about Medicaid. Use the locator tool to find a FQHC near you.