Medi-Cal Update 2011
Medi-Cal
is a welfare program that helps with the cost of skilled nursing care.
In order to receive Medi-Cal benefits, one must be financially eligible.
To qualify, a single person may have unlimited amounts of exempt assets
plus $2,000 in non-exempt assets. For married couples, if one spouse
requires long-term care, the well spouse may retain unlimited "exempt"
assets plus $109,560.00 in other assets. This $109,560.00 figure is
known as the community spouse resource allowance or "CSRA".
Exempt assets include the following property:
your home
personal property
jewelry
burial plans/plots
one car
ins. w/face value of $1,500 or less
IRAccounts
certain annuities
business property
Anything not listed above as exempt is probably "non-exempt."
To
determine whether your spouse is eligible for Medi-Cal, compute the
total value of your non-exempt assets. If the total is $109,560.00 or
less (plus the $2,000 that your ill spouse is allowed to retain), then
your spouse is eligible for Medi-Cal. If the total exceeds that figure,
you will need to do some Medi-Cal planning. For example, you may want to
either spend down or convert some of your non-exempt assets to exempt
assets. One way to spend down is to pay off any mortgage on your home.
Another is to sell your car (if it is old) and purchase a new, more
expensive, and, hopefully, reliable one. You can purchase an annuity as
another way to convert your assets to exempt (make the purchase shortly
before applying, make sure it is a qualifying annuity, and make sure
that annuities are still exempt).
Many people ask about
"gifting" their assets. Gifts can be made under specific circumstances
but there are Medi-Cal penalties to be considered. Medi-Cal will "look
back" 30 months to determine if any gifting has occurred and whether a
period of ineligibility exists. It is important to consult with an elder
law attorney before making any gifts for Medi-Cal purposes.
When
determining a course of action, there is a factor to consider in
addition to the financial factors. This has to do with the quality of
care. You will probably have a much broader selection of skilled nursing
facilities if you can privately pay the cost of long-term care for a
period of time. Long-term care facilities are not required to accept new
Medi-Cal patients, but Medi-Cal certified facilities are required to
keep a patient who switches from private-pay to Medi-Cal. If you will
initially private pay, but think you may need to apply for Medi-Cal at a
later date, be sure that your spouse is placed in a Medi-Cal certified
facility.
Once the Medi-Cal application is approved, the name of
the ill spouse must be removed from all non-exempt assets in excess of
$2,000.00. You may need the assistance of an elder law attorney to get
the assets into your name if your spouse lacks the capacity to remove
his or her name and there is no valid power of attorney in effect.
Your
spouse may have to pay a "share of cost" towards his or her long-term
care. Generally, you can keep all income paid in your name, and the ill
spouse must pay all income in his or her name to the nursing home as the
"share of cost". However, there is one important exception. If the
monthly income sources in your name are less than $2,739.00, you may
retain an amount from your spouse's income needed to bring your income
up to $2,739.00.
For example, if you receive Social Security in
the amount of $400.00 per month and your ill spouse receives $1,100.00
in Social Security plus $1,700.00 from a pension, the total monthly
income received by both of you is $3,200.00. You keep $2,739.00 and the
balance is paid to the nursing home as the share of cost (less a $35.00
monthly personal needs allowance). If your combined incomes are less
than $2,739.00, you keep all of the income and there is no share of
cost.
If your own income is under $2,739.00 (regardless of the
ill spouse's income) and your assets exceed the CSRA, you may be able to
obtain an order allowing you to keep more assets to increase your
income. If this is an option for you, you will not need to spend down
your assets, make gifts or convert them to non-exempt assets. You should
consult an elder law attorney if you would like to explore increasing
the CSRA.
The need for long-term care does not have to
financially paralyze your family. There is much you can do to maximize
your resources and secure your own future.