New attacks on the homes of Michigan seniors

In newly published rules the Michigan Department of Human Services is proposing regulations that will force some Michigan seniors to sell their homes and use all the proceeds to pay for nursing home care. Currently you cannot qualify for Medicaid if the equity in your home is over $500,000. In the past the common solution was to obtain a mortgage to reduce the equity below $500,000. The mortgage proceeds did not count against Medicaid eligibility.

Now, with the proposed rules, mortgage proceeds would count against Medicaid eligibility. This effectively ends any type of planning to protect homes worth more than $500,000. This new rule results in some unfair situations.

For example, someone with a $450,000 home can keep that home protected and pass it on to his heirs, but someone with a $501,000 home has to sell the home and spend all the proceeds on long-term care expenses. This is obviously an unfair result.

Hopefully, the Michigan Department of Human Services will correct this knee-jerk law change and once again allow for equity to prevail when in comes to the homes of seniors in long-term care.