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Elder Law and Medi-Cal Planning in California
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Serving families with a multitude of issues related to qualifying, applying for and obtaining Medi-Cal coverage in Milpitas, Fremont, San Jose and throughout the Silicon Valley region.
The high cost of long-term care in California has made planning a critically important issue for most middle class seniors and their families. In fact, most seniors will likely require some form of long-term care. Sadly, many of them are unprepared for the significant financial burdens it places on their family’s hard earned savings. Financial devastation looms large for a family facing ongoing care at a rate of $10,000 or more per month.
Long-Term Care Options
While some seniors are able to afford private pay care, the cost of long-term care will wipe out savings of all but the wealthiest families in a matter of years. Those who have planned ahead by purchasing long-term care insurance have a degree of certainty and peace of mind, knowing that they have a lesser need to rely on other sources in the future. Unfortunately, many can’t afford the high cost of long term care insurance or worse, because of age of medical condition cannot qualify for long term care insurance altogether. If you do have long-term care insurance, you should be aware of what your policy covers. Many policies have high deductibles or provide for only a short period of care in facility. In fact, many who have long-term care insurance still have to resort to Medicaid to pay for their care.
Medi-Cal Eligibility
The Look-Back Period is a period of time during which Medi-Cal is allowed to inquire about an applicant’s financial history and question them about transactions and transfers made within the 30 months prior to application. THIS IS NOT A 30-MONTH BAR TO TRANSFERRING PROPERTY. In other words, an applicant can make transfers of their property during this time, however certain transfers may give rise to a period of ineligibility. (See Gifts/Period of Ineligibility below.) Furthermore, for transfers made to or from an irrevocable trust, the Look-Back Period is 60 Months.
A. An applicant is allowed to make gifts of their property during the 30 months prior to application; however such gifts may cause a period of ineligibility to apply. This is simply a period of time during which an applicant is not allowed to apply for Medi-Cal Long Term Care benefits. Once this period of ineligibility expires, the applicant can then apply.
B. For every gift of $5,698, a one month period of ineligibility is created.
C. Example: A $20,000 gift divided by $5,496 equals 3.6 months. Medi-cal rounds down and reduces the period of ineligibility to the lowest full month. In this example, the ineligibility period assessed would be 3 months. In month 4, the applicant can submit an application.
Medi-Cal is California’s Medicaid program, which is funded by both federal and state funds. It is overseen by the Department of Health Services. Medi-Cal has two divisions: one of them provides regular medical care for low-income individuals and the other provides assistance with paying for the high costs of nursing home care. This information is geared towards eligibility for the Medi-Cal Long Term Care program. To receive these Medi-Cal benefits, the applicant’s (and spouse’s, if married) assets must be within the Medi-Cal resource limits. If assets exceed the Medi-Cal resource limits, the excess must be “spent down” until the guidelines are met.
The first and most important concept of understanding Medi-Cal Long Term Care eligibility is the way the state classifies assets into 3 categories: Countable Assets, Exempt Assets, or Unavailable Assets. (Exempt and Unavailable assets will not affect a person’s eligibility for Medi-Cal Long Term Care…in other words, these assets are not counted.)
A. Countable Assets.
1. Resource Limits: An applicant cannot have countable assets in excess of the applicable resource limits, which for the year 2009 are as follows:
Single Applicant: $2,000.00 In applicant’s name; no other assets
Married Applicant: $2,000.00 In applicant’s name
Applicant’s Spouse: $109,560.00 In spouse’s name
Both spouses in long term care: $2,000.00 in each spouse's name;no other assets
2. What Assets are Countable? These must be spent down and/or converted to Exempt or Unavailable assets prior to application:
Bank Accounts (Checking/Savings)
Money Market Accounts
Certificates of Deposit (CDs)
Mutual Funds
Stocks & Bonds
Real Estate (other than the home)
B. Exempt Assets.
The home and home improvements
Personal Service Contracts
Household goods and debt payments
Personal effects, family heirlooms, jewelry, etc.
One car
Term life insurance policies without cash value
Prepaid burial plans (if irrevocable)
IRA’s and work-related pensions if in distribution (periodic payments of principal and interest)
IRA’s and work-related pensions in spouse’s name
Immediate Annuities (if annuitized for the annuitant’s life expectancy or shorter period of time)
C. Unavailable Assets.
Listed Real Estate
Property or Accounts held in Joint Tenancy
Trust Deeds and Notes
Treatment of an individual’s income is different than that of their assets. Once an applicant meets the proper asset resource requirements, the state will then look at their income to determine their Share Of Cost, or their contribution towards their monthly cost of care.
A. Income (monthly) – includes: social security, pension, interest, dividends, etc.
B. Income is used to determine SHARE OF COST (all income is counted, less a $35 personal needs allowance)
C. SPECIAL RULE FOR MARRIED APPLICANTS: The spouse remaining in the home must have a Minimum Monthly Maintenance Needs Allowance of $2,739.00 per month before the applicant spouse’s income will be counted towards his or her Share Of Cost.
D. If monthly income is GREATER than the applicant’s cost of care, the applicant does not need Medi-Cal Long Term Care benefits because the assets (principal) will not be exposed to spend-down.
Contact our Milpitas CA elder law and Medi-Cal attorneys to schedule an appointment to discuss how we can help you qualify and apply for Medi-Cal for long term care coverage. We make housecalls and serve clients in Fremont, San Jose and throughout Santa Clara County, CA.
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The lawyers at Sowards Law Firm assist clients with Estate Planning, Wills, Living Trusts, Probate, Estate Administration, Medi-Cal Planning, Business Law and LLC Preparation throughout California, including clients located in and around, Oakland, Palo Alto, Petaluma, Pleasanton, Point Reyes, Redwood City, Richmond, Salinas, San Carlos, San Francisco, San Jose, San Leandro, San Rafael, San Ramon, Santa Clara, Santa Cruz, Santa Rosa, South San Francisco, Sunnyvale, Union City and Vallejo.
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