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Elder Law and Medi-Cal Planning

Elder Law

With the percentage of older Americans expected to outnumber their younger counterparts by the year 2050 it should be no surprise that services geared toward the elderly are becoming more frequent in the United States. The law has also taken note of the increasing elderly population by creating a specialty area, known as “elder law” that is aimed at addressing the unique legal issues faced by older individuals and those who care for them. Long-term care is one of those issues for most elderly individuals.

The average American can expect to live almost twice as long as his or her counterpart lived a century ago. A longer life expectancy, however, dramatically increases the likelihood that you will spend time in a long-term care facility at some point in your life. With an average cost of over $75,000 per year to stay in a long-term care facility can easily wipe out a lifetime’s worth of careful saving and prudent investing. California’s Medi-Cal program can help; however, those same assets could prevent eligibility for the program. By including Medi-Cal planning in your overall estate plan you can protect your hard-earned assets and significantly increase the odds of qualifying for assistance paying for long-term care should you need it in the future.

Sowards Law Firm offers its specialized knowledge, skill, and experience to help you follow all the proper application procedures, and handle all of the necessary legal correspondence with your local Medi-Cal office. We will see your case through to its conclusion and work hard to produce a positive outcome for you and your family.

What's the Difference Between Medicare and Medi-Cal?

Medicare is health insurance for people over sixty-five. It pays for hospital stays, doctor visits, and medical tests. It covers only limited skilled nursing care. Medi-Cal is a California state program that provides health insurance for limited income individuals who meet certain economic criteria for eligibility – it does cover the costs of nursing care.

What is Medi-Cal Planning?

Medi-Cal Planning involves developing a plan to reallocate your assets in such a way that Medi-Cal will not take them into consideration when determining your eligibility for coverage. If nursing home care is needed in the future, you can qualify to have Medi-Cal pay for the cost of care, rather than depleting your own resources to cover these costs.

Will You Need Long-Term Care?

Though people prefer not to think about it, the odds are favorable that you will end up in a long-term care facility at some point. You have a one in five chance of needing long-term care prior to retirement age. For those who live to age 65, two in five will go on to need long-term care and by age 80 the likelihood of needing long-term care drops to three in four.

Paying for Long-Term Care

The average stay in a long-term care facility is 2.5 years – a stay that is typically not covered by private health insurance or by the Medicare program. The good news is that California’s Medi-Cal will cover costs associated with long-term care if you qualify for benefits. By incorporating Medi-Cal planning into your existing estate plan you can significantly increase your chances of qualifying for benefits when you need them.

Qualifying for Medi-Cal

California's 2023 Medi-Cal program asset limits are very low - $130,000 for a single applicant and $195,000 for married applicants (in January 2024 there will no longer be a limit on assets for anyone on any Medi-Cal program). This means you cannot own countable assets that exceed the limit and qualify for Medi-Cal. Those assets will need to be depleted before Medi-Cal benefits will start paying for your care. Moreover, simply transferring assets prior to applying isn't a solution because the program uses a five year "look-back" period. Medi-Cal planning, however, is a solution. By using proven legal strategies and techniques you can protect your assets and ensure eligibility for much needed benefits down the road.

The elder law attorneys at Sowards Law Firm understand the unique legal issues that the elderly, and those who care for them, face and are dedicated to helping resolve those issues. One issue that can be prevented is the loss of assets because of long-term care expenses. To get started with your Medi-Cal planning, contact the San Jose and South San Francisco elder law attorneys today by calling (408) 371-6000.

Medi-Cal Resource Limits for Long Term Care

The following property is generally exempt and therefore not counted in determining Long Term Care Medi-Cal eligibility:

  • The home: totally excluded, if it is the principal residence. The applicant must state an "intent to return to the home." Includes mobile home, houseboat, or an entire multi-unit dwelling as long as any portion serves as the principal residence of the applicant. (See "Your Home & Medi-Cal" for more information)
  • Other real property: may be excluded if it is used in whole or in part as a business or means of self-support (you should see an attorney if you have other real property).
  • Household goods and personal effects: totally exempt.
  • Jewelry: for a single person, wedding, engagement rings and heirlooms, and items of jewelry with a net market value of $100 or less are totally exempt; for spouses, there is no limit on exempt jewelry for determining the institutionalized spouse's eligibility.
  • One car is generally exempt if used for the benefit of the applicant or if needed for medical reasons.
  • Whole life insurance policies with a total face value (also called "combined death benefit") of $1,500 or less.
  • Term life insurance: totally excluded.
  • Burial plots: totally excluded, includes headstone, crypts, etc.
  • Prepaid irrevocable burial plan of any amount and $1,500 in designated burial funds. These designated funds must be kept separate from all other accounts.
  • IRAs and work-related pensions: if in applicant's name, the balance of the IRA or the pension is considered unavailable if the applicant is receiving periodic payments of interest and principal. If in the spouse's name, the balance of the IRA or pension is totally exempt.
  • Non-work related annuities: the balanceofcertain types of annuities may be exempt (see CANHR's fact sheet, "Medi-Cal for Long Term Care" for more information.) You should see an attorney if you are considering buying an annuity - call CANHR for a referral.
  • Up to $130,000 in cash reserve, e.g. in savings, checking, etc., for the Medi-Cal applicant, but no asset limit in 2024.
  • Community Spouse Resource Allowance (CSRA) for 2020: the spouse at home can keep the first $128,640 in assets, and may be able to keep more if his/her income is below the Minimum Monthly Maintenance Needs Allowance (MMMNA). For 2020 this amount is $3,216.
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