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By Swogger Bruce & Millar, Jul 2 2018 04:46PM

On May 22, 2018, the Michigan Court of Appeals ruled on a common Medicaid planning technique. The case was In re Estate of Joseph Vansach, Jr. v. Department of Health and Human Services. The ruling was helpful in part, but mostly put limits on planning.



The Michigan Department of Health and Human Services argued that a probate court could not enter a support order directing some of a Medicaid recipient's income to his spouse. MDHHS asserted that it had exclusive jurisdiction to decide income diversion for a community spouse, or Medicaid laws preempted Michigan probate laws. The court of appeal shot down both of these arguments and confirmed that a probate court order may be used to change the Medicaid formula for a community spouse income allowance. This was the good part of the ruling.



The court of appeals ruled:



[A] community spouse is not entitled to have the probate court simply disregard Medicaid . . . in order that the community spouse may maintain his or her standard of living . . . [s]uch a procedure is not contemplated by EPIC, and it is a gross misapplication of the probate court’s authority to enter an order when money is “needed” for “those entitled to the [incapacitated] individual’s support.” See MCL 700.5401(3)(b) (emphasis added). Instead, the actual Medicaid-related realities facing the couple—with all of Medicaid’s pros and cons—become part of the couple’s facts and circumstances that should be considered by the probate court when considering whether to enter a support order a community spouse under MCL700.5401(3)(b). Ultimately, when a community spouse’s institutionalized spouse is receiving Medicaid benefits and has a patient-pay amount, a community spouse seeking a support order under EPIC must show, by clear and convincing evidence, that he or she needs money and is entitled to the institutionalized spouse’s support despite the CSMIA provided under Medicaid and the institutionalized individual’s patient-pay amount under Medicaid.



This was the bad part of the ruling because it placed an extremely high bar to clear to obtain relief from the probate court. We believe that the overall effect of this ruling will be to reduce support orders for community spouses.


By Swogger Bruce & Millar, Jan 4 2018 09:02PM

Community Spouse Resource Allowance: $24,720 - $123,600

The community spouse resource allowance (CSRA) is the amount of countable assets a person can keep while still qualifying their spouse for Medicaid long-term care benefits. The CSRA is calculated by dividing in half the couple's countable assets on the first day of continuous long-term care. The CSRA has a minimum and maximum amount, which is shown above.

Community Spouse Income Allowance: $3,090 (maximum)

The community spouse income allowance (CSIA) is the amount of income from the spouse in long-term care that can be diverted for the use of the community spouse. The CSIA is calculated by a formula; the maximum result of the formula is $3,090.

Divestment Divisor: $8,261

The divestment divisor is the average monthly cost of a nursing home in Michigan. The divisor is used when calculating a penalty period for gifts made during the five-year look-back period. All gifts made during the five years are added together and divided by the average monthly cost of a nursing home in Michigan; the result is the number of months and day that Medicaid will not pay for long-term care expenses. For example, if all the gifts made during the five-year look-back period added up to $82,610, Medicaid would refuse to pay for long-term care expenses for ten months.

Home Equity Limit: $572,000

The home equity limit only applies when there is not a community spouse living in the home. If a single person enters long-term care, their home equity must be below $572,000 to qualify for Medicaid. The limit also applies if both spouses are in long-term care.

MI Choice Waiver Income Limit: $2,250 or $3,375

The MI Choice Waiver Program allows Medicaid to cover some in-home care, and some assisted living expenses. Medicaid for long-term care does not have an income limit; the waiver program is different. There is an income cap for the waiver program; $2,250 for a single person receiving benefits, and $3,375 for a couple receiving benefits. If you qualify for the waiver program, Medicaid allows you to keep all your income to pay for expenses that it does not cover.

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