I have started a new series of posts about problems with our programs for needy seniors. Let’s look at the Medicaid program. Here’s the basic problem: it is grossly unfair.
Most people know that Medicaid has a nursing home program. But what about help in home? Believe it or not, it has home benefits! But to get that help, well . . . .
You’ve heard of dirt-poor? Try to buy a load of dirt today — it’s expensive! The senior may have no more than $2000 in savings. So, to get help a senior has to be poorer than dirt.
$2,000? When did they decide on that? 1984. Yes, almost 40 years ago and NO adjustment for inflation. In today’s dollars that would be over $5,400. Still very, very poor. Why hasn’t it been raised? Nobody cares. Ask any Senator or Rep and you’ll get a “I’ll get back to you.”
But wait there’s more. A senior applying for Medicaid can have a house. A poorer than dirt house? NO. It can have a value up to $636,000! That is not a typo. And, the senior can have a car. A new one too. Yes, a Cadillac or more realistically a recent SUV.
But wait there’s more. If the senior needs nursing home care, then Medicaid will pay. But. Medicaid wants the house for payback. Yes, “the government” will “take your house.” (Technically it is by the claim procedure in probate.) You have committed no crime, you have served your country, you have paid your taxes. But, if you get dementia and need a nursing home you will lose everything because of Medicaid Estate Recovery. Some would say that’s fair – you’ve got to pay back the gov. Why? Because the gov – Medicaid – paid maybe $7,000 a month to the nursing home. They want every dollar back.
Fair? Has any family lost their home to pay back Medicare for all the treatment a senior received in the hospital? No. Quarter million dollars for heart operation? No problem. Million dollars for cancer treatment? No problem. Medicare does not come after your house after you die.
But. Have Medicaid pay $165,000 for a couple years in the nursing home because you had Alzheimer’s? Big problem. They want it all back.
That is not right!
This is what we’ll be talking about in this series. And I hope “somebody hears about it.”
Low-income seniors in Michigan are supposed to get a homestead property tax credit, worth up to $1,500. But due to rising home prices many cannot get ANY credit at all!
Seniors are eligible for the tax credit on the amount of property tax they pay that is more than 3.2% of their income.
How the credit is calculated?
Let’s use an example. A widow’s income is Social Security of $2,000 per month or $24,000 per year. 3.2% of her income is $768. Let’s say she lives in Farmington Hills in Oakland County. According to Realtor.com the median price of homes in Farmington Hills is $318,000. So if she has an average home worth $320,000., the taxable value of her home would be $160,000. According to the smartasset.com website, her property taxes would be $2,480. So it would seem that she should get the full $1,500 credit since $2,460 is $1,692 over her 3.2% of income ($768). BUT, she will get ZERO dollars.
Why? Because the taxable value of her home exceeds the $136,000 taxable value maximum. That’s right, if her home were worth $272,000 or less she would get the full $1,500 tax credit. It doesn’t make sense. Seniors with just average suburban homes get nothing in the tax credit.
I understand that Michigan state senator Runestad and The Michigan Elder Law Section is looking into this issue and we should expect a report in the spring. Contact your Michigan state senator and representative if you or your senior relatives don’t get their Michigan property tax credit.
I’ll post more information when it comes in.