Putting Older Michiganians through the Wringer

Over the past several years, the Michigan Department of Social Services has been ratcheting up the difficulty of applying for long-term care Medicaid. In 2007, diabolical rules about anyone over 65 who gives anything away were put in place. While some states, like Pennsylvania, allow gifts that are within certain limits, Michigan’s rules penalize holiday or birthday gifts to grandkids, church tithes, and even handouts to panhandlers. In practice, eligibility workers try to disqualify applicants who sell their homes at market price, if the sale is below the property tax assessment value. In this real estate market, listing at the assessment value and waiting for a buyer would be like sending Lindsay Lohan a 12-step brochure and waiting for her to sober up.

Earlier this year, an eligibility manual revision included rules on jointly-held property that would be farcical if they were not so unfair to vulnerable adults. Michigan DHS goes to great lengths to make it difficult to qualify and get an application approved. The Department seems to believe that the most cherished goal of anyone over 65 is to get into a nursing home and have the state pay for the care. Since it assumes that older Americans spend all their time devising ways to get rid of their money, the Department devises every trick and hurdle it can think of to thwart anyone qualifying for Medicaid.

Having stuck joint owners of property like lambs at Eid, Michigan Medicaid decided to victimize the dead. It instituted estate recovery to grab the homes of deceased Medicaid recipients. The estate-recovery program initiated this past summer was undesirable, but not unreasonable. There was an exclusion equal to half the average price of a home in the county. Now, Michigan Senator Kahn, from Saginaw, has hatched a plot to suck Medicaid recipients’ estates drier than an appellate brief in a utilities rate case. For details review “Can the Kahn Plan,” June 12, 2011.

That the state is so hostile to people in nursing homes is perplexing. The Engler Administration, from 1991 to 2002, was much more accommodating. It made sense for the state to interpret the rules liberally. While the state is now trying to cut corners, Medicaid is the wrong program to scrimp on because the state gains so much by spending Medicaid dollars.

It only costs the state about a quarter to spend a Medicaid dollar. The federal government covers about 55% of the Medicaid budget. Since medical expenses largely fund payroll and building expenses, the state gets back 10-15% of the Medicaid dollar in payroll, sales, and property taxes. In light of the federal subsidy and recovery through taxes cutting back on Medicaid spending is false economy. The state is hurting itself by being so niggardly, as well as making life difficult for some our least fortunate citizens. Lean on your state legislators to vote against the Kahn Plan, Senate Bills 404, 405, and 406, ant to urge the Department of Human Services to stop stuffing elderly citizens into the wringer.


John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
©2011 John B. Payne, Attorney

No Comment on "Putting Older Michiganians through the Wringer"

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