San Diego Elder Law
Medi-Cal Benefits
Medi-Cal Planning
Help your loved one get quality nursing home care
Medi-Cal is California’s program for administering federal Medicaid funds. Medi-Cal has several different programs. The most misunderstood is “Long Term Care” coverage. Most people first hear about Medi-Cal Long Term Care coverage when a family member or loved one is hospitalized, then discharged to a rehabilitation or skilled nursing facility. Medicare may pay for this extended care for a while…but not long. The maximum period Medicare will pay for qualifying individuals is 100 days, but most families will find themselves receiving a notice of termination of Medicare long before that. For those who do not have long term care insurance, the choice then becomes to pay the cost themselves, over $10,000 per month, or apply for Long Term Care Medi-Cal. Few could afford to private pay for long without seriously impacting the financial security of the spouse and family. Both married and unmarried individuals also worry as the estate they intended to pass to their children or heirs is rapidly eaten up by nursing home bills.
The clear alternative is the Long Term Care Medi-Cal program for patients in Skilled Nursing Facilities. Medi-Cal will pay for 100% of nursing home expenses for those who qualify. As of January 1, 2024 there is no more asset test for this, or any Medi-Cal program in California. There is also no income limit in eligibility determinations. This means you can qualify for this assistance regardless of the value of your property and financial holdings or your income. Some may need to pay a “Share of Cost” determined by your income, but many will not. Share of Cost will always be less than the income of the individual applying, so there will be no need to liquidate assets to pay for this care. Even those with a relatively high Share of Cost pay far less than the private pay rate for a nursing home. With our assistance, a most people who consult with us can qualify for Long Term Care Medi-Cal for Skilled Nursing, legally preserving most, if not all, of their assets for themselves and their loved ones. We can help you minimize the “share of cost,” and often use techniques allowing you to direct your share of cost for payment for beneficial therapy for your family member. We can also show you how to avoid recovery claims by the State, and review other Med-Cal programs offering care and assistance in-home and in other levels of care.
Medi-Cal Questions
There is an unfortunate amount of misinformation and misunderstanding about how to qualify for Long Term Care Medi-Cal.
Much of this misinformation is dispensed by professionals who believe they understand the programs, but do not. Some of this misinformation actually comes from Medi-Cal eligibility workers not familiar with all of the rules of Long Term Care Medi-Cal, or who confuse the rules with those for other Medi-Cal programs. As a result, many people think they must spend all their assets down to qualify for Medi-Cal. This is almost never true. In fact, as of July 1, 2022, an unmarried applicant can have $130,000 of “countable” resources in their name. In addition, many assets are considered “exempt” or “unavailable.” A home, for example, is exempt. An “unavailable” asset is one that is not exempt, but for one reason or another, cannot be liquidated or readily accessed at the time of the application. An example might a time-share that would be difficult to sell. If married, the at-home spouse will be able to keep at least an additional $137,400 above and beyond any exempt or unavailable property as a Community Spouse Resource Allowance (CSRA). In many cases the CSRA can be raised further, sometimes substantially further. A Certified Elder Law Attorney can advise you whether or not you would qualify for this increase and explain how this is done.
Our Medi-Cal Planning goals are:
- Obtain eligibility for Long Term Care Medi-Cal as soon as possible, and avoid spending down all of the family assets private paying.
- Minimize the “share of cost,” the amount the applicant must contribute each month prior to full Medi-Cal coverage. There are also innovative tools that allow share of cost to be directed to needed supplemental therapy.
- Protect the spouse. There are substantial protections for a spouse, both for asset and income protection. We are aware of what they are and use them.
- Recovery avoidance. Medi-Cal, under some circumstances, may attempt to recover what they paid after the death of the benefit’s recipient. However, there are methods of avoiding recovery. Although not available in all cases, we know the recovery avoidance methods and how to use them. Most of our clients have no recovery actions.
The rules concerning Medi-Cal qualification, share of cost, and recovery are complicated. Many thousands of your family’s dollars may be at stake. Every year thousands of people unnecessarily private pay because they don’t know their rights. Don’t let this describe your family. Before assuming you will not qualify for Medi-Cal, please consult with us, or another qualified Elder Law Attorney. If you wish, we will handle the entire Medi-Cal application process.
The state can demand to be reimbursed for all benefits paid after the Medi-Cal beneficiary’s death. This could include forcing the sale of the family home to pay off the claim. However, there are several significant exceptions and methods that can avoid this. Most importantly, the State cannot recover during the life of a surviving spouse. In some cases though, they may attempt to recover after the surviving spouse passes, but before the estate is distributed to their children or beneficiaries. There are, however, exceptions to this that offer planning opportunities. Significant among these exceptions: the State can recover only against property that is in the estate of the Medi-Cal recipient at that time of their death. There are planning tools that can assure that there is little or no property that will be considered to be in the Medi-Cal recipient’s estate, therefore, no recovery. Again, there are some technical pitfalls and significant adverse tax impacts if this is not done correctly, so please consult a Certified Elder Law Attorney experienced in Medi-Cal planning before attempting recovery-avoidance planning or asset transfers. Much may be at stake in doing this right. We frequently see families where they have attempted their own asset transfers, either for perceived eligibility or recovery purposes, which has generated ineligibility and catastrophic tax impacts far worse than any recovery. We would be pleased to help you develop your recovery-avoidance plan, and draft any required documents to assure it is done correctly.
Our Myths and Facts section is being updated to reflect changes to Medi-Cal Rules. Please check back later!
Most “Medi-Cal Planners” are in fact insurance agents or financial planners making large commissions selling “Medi-Cal Exempt” annuities. We are a law firm, not insurance agents. In our experience, annuities are seldom advisable. If properly drafted, they are “exempt” assets not counted by Medi-Cal. However, they are high in commission charges and low in liquidity. They have substantial penalties should you need the money, and will generate a stream of income that must be turned over to the nursing home as “share of cost.” Upon the death of the Medi-Cal beneficiary, the State of California may recover for the benefits paid against any annuity remainder. There are many strategies superior to annuities, but don’t expect to hear about them from people who make their living selling annuities! An elder law attorney familiar with Medi-Cal planning can do much better for you…whether our office or another.
We suggest you look for a Medi-Cal planning firm that affirms they are members of the National Academy of Elder Law Attorneys (NAELA). An elder law attorney will charge you only for their time, and will not be profiting from selling you a poor product.
Typically, our initial contact with a family is related to a crisis situation necessitating immediate action or planning, or a recent diagnosis that will eventually lead to long term chronic care issues. Being unexpectedly faced with these situations, trying to identify what needs to be done, and suddenly finding oneself in a complex maze seeking legal, medical, and social support, can be daunting and overwhelming. The most common thing we hear is “I don’t even know where to begin!”
The first step is to meet with our clients and their families to identify what is happening, and what their needs are, both immediate, and long term. Our attorneys and legal staff will analyze the family income and assets, and help identify resources, public benefits, and prioritize what needs to be done. Our legal team works together to make sure that the legal and financial plan serves the care plan, and that the care plan considers the appropriate use of financial resources. We will meet with the family to discuss these findings and offer specific care and legal recommendations. We will listen to their questions and concerns and work together to implement the legal and care strategies that best meet their needs and to ensure the family’s short term and long term needs are firmly in place.