Updated September 2026. Written and reviewed by the Lily Hospice clinical team.

In Michigan, hospice and long-term-care Medicaid work together. Medicare pays the hospice for the hospice care; Medicaid, when the person qualifies, pays the nursing home’s room and board, passed through the hospice. A person on Medicaid only is covered for hospice too. A hospice social worker helps families apply, at no charge.

Two of the hardest words in a family’s vocabulary near the end of a parent’s life are “nursing home” and “Medicaid.” Put hospice in the same sentence and most people assume there must be a catch: that choosing hospice will cost the Medicaid bed, or that Medicaid means a family cannot pick a hospice, or that the paperwork will swallow the time that is left. None of that is true, but the rules are genuinely confusing, so this article walks through how the two programs fit together in Michigan, what a family in Oakland, Macomb or Wayne County actually pays, and where to get help with the application.

First, two different programs doing two different jobs

The hospice benefit (under Medicare Part A, or under Michigan Medicaid for someone without Medicare) pays the hospice for the care of the terminal illness: nursing visits, the aide, the social worker and chaplain, comfort medications, equipment and supplies, on-call nursing at night, and grief support for the family afterward. It is explained in Does Medicare cover hospice in Michigan? and it does not pay for a place to live.

Long-term-care Medicaid is the program that pays for a place to live and be cared for when someone needs a nursing-home level of care and has run down their savings. In Michigan it pays nursing-facility room and board, and through the MI Choice waiver it can pay for care at home or in some assisted living settings instead. It is administered by the Michigan Department of Health and Human Services (MDHHS) and applied for through MI Bridges or a local MDHHS office.

A person can be on both at once, and in nursing homes across metro Detroit that is the most common arrangement of all.

The most common situation: Medicare plus Medicaid in a nursing home

Picture a widow in a skilled nursing facility in Warren or Livonia. She has Medicare, like nearly everyone over 65, and after two years of paying privately she has qualified for Medicaid, which now pays the facility. Her doctor says her heart failure or dementia has reached the point where hospice fits.

When she elects hospice, here is what changes and what does not:

  • Medicare pays the hospice for everything related to the terminal illness, exactly as it would at home. The hospice nurse, aide, social worker and chaplain come to her room. Her comfort medications, oxygen and a better mattress come through the hospice.
  • Medicaid keeps paying the room and board, but the money now flows through the hospice. Federal Medicaid rules require the state to pay the hospice at least 95% of what it would have paid the nursing home for room and board, and the hospice passes that payment through to the facility. The family does nothing; the hospice and the facility handle it between them.
  • Her patient-pay amount stays the same. Michigan lets a nursing-home Medicaid resident keep a personal needs allowance (published at $60 a month for 2026) and requires the rest of her income to go toward her care; that does not change when hospice begins.
  • Her Medicaid bed is not at risk. Electing hospice does not end her Medicaid, and stopping hospice later does not either.

The facility staff keep doing the daily care they always did. The hospice team adds a layer on top, and the two teams share one plan. How that division of labor works is explained in hospice in an assisted living or nursing home.

If the person has Medicaid only

Someone under 65 with a terminal illness, or an older adult who never enrolled in Medicare, may have Michigan Medicaid alone. Michigan Medicaid includes a hospice benefit that mirrors Medicare’s, covering the same visits, medications, equipment and supplies through the hospice. If the person is on a Medicaid managed-care plan, hospice is still covered and the hospice handles the authorization. Our page on hospice with Medicaid only or no insurance covers that path, including how coverage can be applied for quickly when there is none.

If the person is at home and the family is running out of money

This is where families most often need a guide. Hospice visits are scheduled; they are not a live-in aide. When a parent at home needs more hands than the family, the hospice visits and volunteers can provide, the question becomes how to pay for extra hours or for a move.

MI Choice waiver. Michigan’s Medicaid waiver pays for in-home services, and in some cases assisted living, for people who need a nursing-home level of care but want to stay out of one. In our area it is run through the Area Agencies on Aging (AgeWays for Oakland and Macomb, The Senior Alliance for western and Downriver Wayne, and the Detroit Area Agency on Aging for Detroit, Hamtramck, Highland Park, Harper Woods and the Grosse Pointes). Hospice and MI Choice can run at the same time, with the hospice covering the terminal illness and the waiver covering personal care hours. A Lily social worker makes the referral. Read more in hospice when your parent lives alone.

Nursing-facility Medicaid. When a move becomes the safer choice, the hospice simply continues in the facility, and the Medicaid application for room and board runs alongside. Hospice does not have to stop or restart.

What Michigan looks at when someone applies

MDHHS publishes the figures every year and adjusts them for inflation, so treat the numbers below as the 2026 reference points and confirm the current ones at application time. In broad strokes:

  • Medical need. The person must need a nursing-home level of care. Someone eligible for hospice almost always meets this.
  • Countable assets. For 2026 a single applicant may keep up to $9,950 in countable assets (Michigan raised this from the long-standing $2,000 limit in 2025). The home, one vehicle, personal belongings and a prepaid funeral contract are generally not counted, subject to a home-equity cap.
  • Income. There is no hard income cap for nursing-facility Medicaid in Michigan; instead, income above the personal needs allowance and certain deductions becomes the patient-pay amount toward the facility bill.
  • A spouse at home is protected. The community spouse keeps a share of the couple’s assets (between roughly $32,500 and $162,660 for 2026) and enough monthly income to live on, within published limits.
  • The five-year look-back. Gifts or transfers of assets in the 60 months before applying can delay eligibility. This is the rule that catches families who moved money around without advice.
  • Estate recovery. After the person dies, Michigan can seek repayment of long-term-care Medicaid costs from the estate, with exemptions for a surviving spouse and certain other situations.

These rules are why we suggest two things at once: call the hospice for the care, and, when assets are involved, speak with an elder-law attorney or the Area Agency on Aging’s benefits counselors about the application. Lily’s social worker can point you to both and will not let the money conversation delay the care conversation.

What the family actually pays

In a nursing home with Medicare and Medicaid: the patient-pay amount from her own income, as before; nothing for hospice.

In a nursing home while the Medicaid application is pending: the private-pay rate to the facility until Medicaid is approved (Michigan can backdate coverage up to three months when the person was eligible during those months); nothing for hospice.

In assisted living or memory care: the community’s monthly charge, as before, because Medicaid generally does not pay assisted-living room and board (MI Choice may cover some services there); nothing for hospice.

At home: nothing for hospice; the cost of any private-duty hours the family chooses to add. The only usual charges under the Medicare hospice benefit anywhere are up to $5 per prescription and 5% of a short respite stay, and many hospices, Lily included, do not bill the prescription copay. The full breakdown is in how much hospice costs in Michigan.

Five mistakes families make, and how to avoid them

Waiting to call hospice until the Medicaid application is done. They are separate. Hospice can start today; the application can take weeks.

Assuming the nursing home chooses the hospice. Facilities often have hospices they work with, but the choice belongs to the patient and family, on Medicaid as much as on Medicare. Compare hospices with our metro Detroit hospice directory.

Giving away assets to “protect” them. Transfers inside the look-back window can create a penalty period with no coverage. Get advice first.

Believing hospice will end when Medicaid begins, or the reverse. Neither program cancels the other.

Not asking about respite. A caregiver at home can place a loved one in a facility for up to five days of hospice respite under Medicare, whether or not a Medicaid application is in progress. See what hospice respite care is.

Common questions

Will choosing hospice make my mother lose her Medicaid nursing-home bed?

No. Medicaid keeps paying the room and board, routed through the hospice, and the hospice adds care on top. Her bed and her Medicaid status are unchanged.

Does Medicaid pay for hospice in Michigan?

Yes. Michigan Medicaid has a hospice benefit modeled on Medicare’s. For someone with both programs, Medicare pays the hospice and Medicaid may pay nursing-facility room and board.

Can we pick any hospice if she is on Medicaid?

Yes. Any Medicare-certified hospice that serves the facility can be chosen. The nursing home may suggest one, but the decision is the family’s.

Does hospice pay for the nursing home or assisted living?

No. Hospice pays for the hospice services delivered there. Room and board is paid by the person, by Medicaid for those who qualify in a nursing facility, or by long-term-care insurance.

How much can she have in the bank and still qualify?

For 2026, Michigan’s published countable-asset limit for a single applicant is $9,950, with the home and certain other assets not counted and additional protections for a spouse at home. MDHHS adjusts the figure each year, so confirm the current number when you apply.

Can hospice start before Medicaid is approved?

Yes. Hospice is paid by Medicare, or by Medicaid’s hospice benefit once approved, and Michigan can backdate Medicaid up to three months for months the person was eligible. Care never waits on the application.

Who helps with the application?

A hospice social worker, the Area Agency on Aging’s benefits counselors, or an elder-law attorney when assets and a spouse are involved. Lily’s social worker helps families start the MI Bridges application at no charge.

What is the MI Choice waiver, and can it run alongside hospice?

MI Choice is Michigan’s Medicaid waiver that pays for care at home or in some assisted living for people who would otherwise need a nursing home. It can run alongside hospice, with the waiver covering personal-care hours and the hospice covering the terminal illness.

Lily Hospice serves families at home, in assisted living, memory care and nursing facilities across Oakland, Macomb and Wayne counties from our office in Troy. If you are still deciding whether it is time, start with Is It Time? A family’s gentle guide.

Hospice isn’t giving up. It’s showing up. Call (248) 955-5100. A real person answers, 24 hours a day, and our social worker will check your loved one’s coverage before you decide anything.

General education, not legal, financial or medical advice. Medicaid figures are the ones published for 2026 and change each year; eligibility is decided by MDHHS. Sources: Medicaid.gov, “Hospice payments” (nursing-facility room and board paid to the hospice at 95% of the facility rate); MDHHS long-term-care Medicaid eligibility figures for 2026 as published by Michigan elder-law practices.