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…
- Reduce or even eliminate your nursing home bills;
- Protect your life savings and financial security;
- Increase the amount of income the healthy spouse gets to keep; and
- Safely pass on an inheritance to your children.
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?