Long Term Care Attorney in El Dorado Hills
Medi-Cal eligibility is determined by the amount of income and resources available to the applicant.
Medi-Cal is California's version of Medicaid, a federally supported but state-administered welfare program. Medi-Cal is thus a combined federal and California program, funded by general tax revenues. The federal government reimburses California for a percentage of the Medi-Cal payments the state makes on behalf of recipients.
A crucial difference between Medicare and Medi-Cal coverage is that Medicare makes only limited payments for skilled nursing home care, while Medi-Cal pays for custodial nursing home care indefinitely.
Medi-Cal Planning involves the purchasing, transferring, conversion and/or liquidating of assets to enable you or your loved one to qualify under Medi-Cal’s 2-prong test of income and resources.
The most important purpose is to accelerate eligibility.
The second most important purpose is to avoid exposing assets to state reimbursement claims after death for the value of Medi-Cal support provided.
Finally, on some occasions, it is possible to reduce the income that a client must spend for care once he or she receives Medi-Cal support.
Planning to accelerate eligibility always amounts to reducing the applicant's countable assets. California is a "spend down" state in which an aged, blind, or disabled applicant achieves eligibility by showing that he or she is "medically needy," i.e., has a monthly income insufficient to pay for necessary medical care and has countable assets that fall below the $2000 limit.
It is usually easy to show that the applicant's monthly income is insufficient to pay the cost of nursing home care, which usually exceeds $7000 per month.
However, Trusts have had very limited value as Medi-Cal planning devices.
All planning must be done without running afoul of the “Look Back” period of 30 months that may soon be extended to 5 years. The “Look Back” will include such assets transferred within its period possibly disqualifying an individual.
There is a special program for Veterans and Widows of Veterans called the Veteran’s Aid and Attendance Pension Benefit that pays for unreimbursed medical expenses including long term care in nursing homes.
There are two levels of qualification. The Claimant must meet both levels of qualification. The first test is based on facts that cannot be changed (time in service, type of discharge, etc.). However, the second level allows for the claimant to make changes in order to meet the requirements. Those changes include gifting away assets, reducing income, increasing medical expenses.
First Level of Qualification
- The veteran must have served 90 consecutive days on active duty.
- The veteran must not have received a dishonorable discharge.
- The veteran must have served at least 1 day of active duty during a war period. There is no requirement that any service be performed in a combat zone.
- The Widow must not have divorced the Veteran or remarried after the Veteran’s death.
- The Claimant must be certified by a doctor as needing assistance with their daily living activities.
Second Level of Qualification
- The household cannot have more than the Allowable Countable Assets – no more than $80,000 (but, the VA adjudicator has the discretion to decrease this figure, and it is often less than $80,000) In fact, it has been lowered to around $20,000 at this time.
- The adjusted Household Income must be less than the VA Aid and Attendance (A&A) Pension Benefit. This income test is complicated.
With proper planning, the Veteran or the Veteran’s Widow can qualify for A&A Pension moneys and other assistance, while preserving family assets. This pension will help the family pay for long term health care needs and avoid the depletion of the Claimant’s assets.
Unlike Medicaid, A&A can be used for all types of home healthcare and assisted living care. Also, unlike Medicaid, gifts can be made into an irrevocable trust without a “Look Back” period resulting in ineligibility and without estate recovery.
In other words, assets can be transferred just prior to qualification.
As you can see this is a very complicated area of law.