Medi-Cal Planning and Asset Protection
What is Medi-Cal Planning for Long-Term Care?
Medi-Cal is the only governmental program which will cover the costs of long-term care in a skilled facility. Medi-Cal planning, is the process of establishing a plan to qualify someone for Medi-Cal benefits for long-term care, WITHOUT that person spending down their assets to poverty levels, and potentially losing their principal residence.
There are four very important areas to consider in developing a comprehensive Medi-Cal plan:
- Pre-Planning for Medi-Cal Eligibility and Protection Against Medi-Cal Estate Recovery – This important step involves developing an estate plan prior to requiring long-term care, which contains comprehensive Medi-Cal Asset Protection provisions. This assures that even if you can no longer sign legal documents, ALL lawful steps can be taken to protect you, your loved ones, and your assets, if you should require long-term care.
- Eligibility Planning – This step involves structuring your assets such that you are eligible to qualify for Medi-Cal benefits for long-term care;
- Income Planning – This step is taken to reduce or eliminate a Medi-Cal beneficiary’s monthly share of cost co-payment; and
- Medi-Cal Recovery Planning – This step involves reducing, or completely eliminating Medi-Cal recovery against the Medi-Cal beneficiary’s estate (i.e. preventing the government from collecting against your primary residence or other assets for the amount of benefits paid to you for long-term care expenses).
Our office will carefully review your assets, income and estate planning documents to develop a comprehensive Medi-Cal plan tailored to your specific situation. We typically offer our clients several alternative strategies and thoroughly review each strategy with our clients so that they can make an informed decision.
Important Note on Crisis Planning
Incapacity could happen to any of us, at any time, so it is not always possible to plan in advance for the need for long-term care. A long-term care “crisis” is when an individual must enter a nursing home immediately, or in the very near future, and has been advised by the nursing home, social worker, or other so-called “professional” that they have too many assets to qualify for Medi-Cal benefits. If you are facing such a situation, please understand that information provided by friends, family members, social workers, nursing home representatives, or even other professionals, is often outdated or incorrect. Taking the wrong steps could lead to an extended period of ineligibility for benefits, while taking proper steps could save you thousands, or even hundreds of thousands of dollars in long-term care costs.Mr. McKenzie is a past Chairman of the Board of Directors of the Orange County Elder Bar, and his expert guidance could be invaluable to you, and your family, in the event you should require long-term care.
What is Medi-Cal?
Medi-Cal is the state of California’s version of the federal Medicaid program that provides additional health insurance for qualified individuals who are 65 years of age, blind or disabled. Medi-Cal is particularly helpful for individuals who are residing in a skilled nursing home that have exhausted their Medicare skilled nursing home coverage. While Medicare may cover the first 20 days of skilled nursing home expenses, coverage for days 21 through 100 requires a co-payment, and is only available if the patient continues to show improvement in his or her condition. On the other hand, Medi-Cal will continue to pay for skilled nursing home expenses indefinitely, regardless of whether or not the patient continues to show improvement.
Unfortunately, many people are misinformed about the eligibility criteria Medi-Cal uses to determine eligibility. Such misinformation is likely due to the ever changing and complicated Medi-Cal regulations. Despite what you might have heard, you do not have to be destitute in order to qualify for Medi-Cal benefits. With the guidance of a knowledgeable elder law attorney, it is legal to implement various planning techniques in order to qualify for Medi-Cal benefits.
Our law firm is experienced in developing and implementing various Medi-Cal planning techniques to quickly qualify an individual for Medi-Cal benefits and to minimize or completely eliminate any state recovery for benefits received. Medi-Cal planning is our passion and we take great pride in developing sound planning options for our clients tailored to their unique circumstances.
Standard Eligibility Limits for Long-Term Care Medi-Cal Benefits
The applicant must be 65 years of age, blind or disabled in order to receive Medi-Cal Long Term Care benefits. A single applicant may not have more than $2,000.00 (for 2016) in non-exempt assets, while the spouse of a married applicant is allowed $120,900 (for 2017) in non-exempt assets.
Medi-Cal classifies certain assets as exempt and their values are not used in the determining an applicant’s eligibility. The following are the major assets considered exempt by Medi-Cal in determining eligibility:
- Principal Residence
- Certain Life Insurance
- One Vehicle
- Household Goods
- Most Qualified Retirement Accounts (if structured properly)
- Burial Plots
It is important to understand that the above are standard Medi-Cal eligibility limits. For married applicants, it is possible to significantly increase the standard $120,900 limit.
Again, a Medi-Cal eligibility plan should only be carried out under the guidance of a knowledgeable California elder law attorney familiar with Medi-Cal regulations.
Share of Cost
Although an applicant’s income is not an eligibility factor, Medi-Cal does review an applicant’s income to determine the applicant’s monthly co-payment (share of cost). The formula used to determine an applicant’s share of cost has many variables and often allows the applicant’s spouse to retain a large portion of the applicant’s income.
Medi-Cal Estate Recovery and Protection of the Family Home and Other Assets?
Medi-Cal keeps track of the total amount of benefits it pays out over the lifetime of a Medi-Cal beneficiary and attempts to recover that amount from the beneficiary’s remaining estate. Medi-Cal may only recover from the assets that the Medi-Cal beneficiary has an ownership interest in at the time of their passing, and only after the Medi-Cal beneficiary’s spouse also passes away. Thus, the Medi-Cal beneficiary’s spouse will have unrestricted use of the assets for the remainder of their life. In addition, many times we can take steps to protect the family home, and make sure that the State of California cannot recover against it for the value of benefits paid to the Medi-Cal recipient and, under current laws, if someone had established their estate plan through our office, the protection of the home would be assured!
Medi-Cal Planning Services Provided By Our Firm
We understand that Medi-Cal planning can be an emotional undertaking for you and your family. Our office will make the Medi-Cal process as easy as possible by providing the following services:
- Preparation and explanation of alternative Medi-Cal planning strategies available for your specific situation;
- Preparation of the Medi-Cal application forms;
- Implementation of the Medi-Cal qualification strategy of your choice;
- Our office will deal directly with Medi-Cal on your behalf through completion of the application process;
- Preparation of estate planning documents (if applicable);
- Assist you with your overall estate plan; and
- Preparation of all documents necessary to reduce or eliminate Medi-Cal recovery (if applicable).
Medical Planning Orange County
Medi-Cal regulations are constantly updated and changed. Medi-Cal planning should only be done under the supervision of an elder law attorney familiar with Medi-Cal. Certain transfers of property can have significant tax ramifications that should be discussed with your attorney. Furthermore, improper transfers can disqualify a Medi-Cal beneficiary and result in a significant period of ineligibility for Medi-Cal benefits.
Please be advised that the information on this site is not meant to be construed as legal advice. If you need legal advice, or for more information about Medi-Cal Planning, please contact our office at (562) 594-4200 for a FREE 30-minute consultation!