How does Michigan calculate Modified Adjusted Gross Income (MAGI) for Medicaid eligibility in 2026?
Executive summary
Michigan calculates MAGI for Medicaid the same way federal MAGI methodologies require: start with the Internal Revenue Service’s Adjusted Gross Income (AGI), add back certain tax-preferred items, construct a household according to MAGI rules, apply program-specific income thresholds (often tied to the Federal Poverty Level), and exclude assets from MAGI determinations for MAGI-related groups (Healthy Michigan Plan, children, pregnant women) [1] [2] [3]. State manuals and the Bridges eligibility rules implement those federal MAGI methodologies in detail, including the discretionary application of a 5% disregard where necessary to reach eligibility thresholds [4] [2].
1. What “MAGI” means in Michigan: a federal template applied at the state level
Michigan’s MAGI is the Modified Adjusted Gross Income methodology required under the ACA and implemented by CMS; it aligns Medicaid eligibility income rules with the rules used for premium tax credits, meaning states use IRS AGI as the starting point and follow federally defined additions/subtractions to reach MAGI [2] [5] [6].
2. Which income items are counted and which are not
Most earned and unearned income that appears in AGI is counted under MAGI-based Medicaid—wages, self‑employment, interest, dividends, and some taxable benefits—while certain items commonly excluded from AGI calculations or specifically exempted under MAGI rules (for example Supplemental Security Income) are not counted as MAGI for eligibility [7] [2]. Michigan’s Bridges policy guidance also excludes in‑kind benefits (meals, clothing, home energy provided in non‑monetary form) from countable income [4].
3. Constructing the household: whose income is in the calculation
MAGI requires a household composition rule (tax household analog) to determine whose income is combined for eligibility; Michigan follows the MAGI household rules used for premium tax credits and ACA eligibility, which affects parents, children, and adults differently depending on filing status and relationships—details are applied in Michigan’s MAGI manual and program pages such as for the Healthy Michigan Plan [2] [3] [6].
4. Disregards and the 5% rule: a small but important adjustment
Michigan applies the federally recognized “5 percent disregard” methodology in MAGI determinations as set out in the state MAGI guidance: the disregard equals five percent of the Federal Poverty Level for the applicable family size and is applied to the highest income threshold and only when needed to make someone eligible [4] [2]. This is not a flat subtraction from every case but a conditional tool to bridge marginal gaps between counted MAGI and program income limits [2].
5. Program differences and when MAGI is not used
MAGI is the methodology for most eligibility groups—children, pregnant women, parents/caretakers, and expansion adults (Healthy Michigan Plan)—but Michigan still uses non‑MAGI SSI methodology for aged, blind, and disabled long‑term care programs where asset tests and different income rules apply; assets are not considered for MAGI-related groups but remain relevant for SSI-related pathways [2] [7] [8].
6. Operationalizing MAGI in Michigan: Bridges, MI Options and practical notes
Michigan operationalizes MAGI rules through its Bridges eligibility system and MDHHS guidance; applicants’ reported income is compared to program thresholds (often expressed as percentages of FPL such as 133% for Healthy Michigan Plan) and administered through MI Bridges or MI Options with opportunities to appeal or clarify contested calculations [4] [3] [1]. State guidance and consumer help sites reiterate that MAGI generally mirrors IRS AGI while pointing applicants to MDHHS contacts if the calculation appears incorrect [1].
7. Limits of publicly available reporting and where to look next
The state MAGI manual, Bridges policy (BEM 500) and MDHHS program pages are the authoritative sources for procedural rules, while consumer guides summarize limits and special cases such as long‑term care income caps; if a specific income item or household scenario is not covered in these documents, that gap cannot be filled here without consulting MDHHS caseworkers or the full policy manuals [4] [2] [8].