Our Estate Planning and Elder Law FAQs
How do I set up a trust? Does a will have to be notarized to be enforceable? Is my mother eligible for Medi-Cal? Who should I name as a guardian to my children in my will? In our FAQs, we offer answers to the most commonly-asked questions about wills, trusts, probate, and other estate planning topics.
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How Is Medi-Cal Different from Medicare?
A lot of people mistakenly think that Medicare covers long-term nursing home care but it only provides very limited benefits. It is confusing. One of the major differences is that Medi-Cal is a needs-based program or income based healthcare assistance program. Federal, state and local tax funds fund it.
Medicare, on the other hand, is a health-care benefit that you are entitled to when you reach age 65 inasmuch as you paid into it during your working lifetime.
Here's what Medicare does cover with respect to skilled nursing care (nursing home care): (i) covers the first 100 days of skilled nursing care provided it was preceded by an inpatient hospitalization of at least 3 days. For example, a person suffering a stroke typically ends up in the emergency room, with a subsequent hospitalization, followed by rehabilitation in a skilled nursing facility; (ii) Medicare covers the first 20 days in full; and (iii) days 21-100 are partially covered and in 2019, you will be required to pay a daily $167.50 co-payment. After 100 days, the patient is fully responsible. Given that the average monthly cost of nursing home care in California exceeds $8,500 -- that will rapidly deplete an estate. Most families are simply not prepared for that kind of financial burden!
Who Qualifies For Medi-Cal?
Medi-Cal is a combined federal and California state program designed to help people pay the costs of long term nursing care for public assistance recipients and other low-income persons. So it’s a needs-based program. Those who seek it must pass certain eligibility requirements. So you have to demonstrate that you have limited resources available. Notwithstanding the size of an estate however, with the right tools, and using our knowledge of the law and strategies that have been successful in the past, we may be able to…
A single person can have no more than $2000 of what we call countable resources. If an asset is not countable, it is considered exempt or unavailable. There are many assets that are exempt, such as the primary residence and retirement accounts (IRA’s). So really what we are talking about is cash – bank accounts, investment accounts, CD’s, etc. There are also assets that can be classified as “unavailable” – which are considered exempt, because it can’t be easily disposed of, such as a timeshare.
As for married couples, the healthy spouse may keep $126,420 (2019). This is referred to as the “community spouse resource allowance” (“CSRA”). However, if you retain an experienced attorney who specializes in Medi-Cal planning – they can typically increase the CSRA.
As for medical condition, the elder must be limited in at least 3 activities of daily living (“ADL’s”) -- such as needing assistance in walking, bathing, meal prep, or going to the bathroom.
What is the Look-Back?
In the application process, Medi-Cal requires that you provide 30 months of statements for all financial accounts from the date of application. This is referred to as the “look-back” period. All other states have a look-back of 60 months from the date of application. At some point, California will also have a 60-month look-back. Medi-Cal is looking to see if any gifts were made (uncompensated transfers). For example, if you gifted $25,000 to an adult child within those 30 months, Medi-Cal will consider that an asset of the applicant’s, causing a delay in being qualified.
How Do You Spend-Down to Qualify?
Let’s say that you are trying to get an elder qualified and they have about $30,000 cash that renders the elder applicant ineligible. Medi-Cal permits a “spend down” such as home repairs, purchasing a car (if you don’t have one), buying a burial plot, and attorney’s fees, among others. This permissible spending down of cash would render you eligible for Medi-Cal.
How Do You Plan For Medi-Cal Qualification?
In developing a comprehensive Medi-Cal plan there are three important areas to consider:
- Eligibility Planning: First, we must get you qualified for Med-Cal.
- Income Planning: Once qualified, we plan on reducing or eliminating your “share of cost” copayment. While Medi-Cal pays for a part of your care costs, you may pay the other part. With proper planning, we may be able to reduce your portion of those costs.
- Asset Protection: Next we implement a plan to protect assets from Medi-Cal estate recovery (Medi-Cal Asset Protection Trust). See Can Medi-Cal Force Recovery From a Deceased Recipient's Estate?
How Can I File An Appeal Regarding My Medi-Cal Eligibility?
If you don’t agree with the Medi-Cal determination of eligibility, you can appeal it and when a decision is made, you will receive a Medi-Cal Notice Of Action (“NOA”) in the mail. If you are approved, the NOA will include information of your eligibility and benefits. If you are denied, it will include information on your right to a hearing and have an appeal. That would be in the county where you applied so you’d get that appeal and if the appeal was denied then you can go to the Appeals Court.