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What You Need to Know About California Medi-Cal Asset Protection

Many families in Los Angeles prepare for retirement with an estate planning attorney and believe that they have covered all contingency plans and unexpected occurrences. 

Unfortunately, some learn only after the unforeseen strikes, such as an illness or the need for long-term care, that the policies they held in place for moments like these do not cover all expenses.

An experienced California elder law attorney who is well-versed in Medi-Cal requirements and regulations could have made all the difference.

Fortunately, there are steps you can take now to weather an unexpected crisis without having to wipe out savings and assets to cover medical costs and extensive long-term care. Financial aid in the form of Medi-Cal is available. 

With correct planning and protection, Medi-Cal will pay for most uncovered health expenses, including long-term care in a nursing home. Let's take a look at the requirements, how to set your family up to qualify, and how to protect your assets.

What Is Medi-Cal?

Medi-Cal is California's Medicaid program. This program provides health coverage for people who qualify due to low-income and asset levels. 

People with Medicare can also qualify for Medi-Cal, which then becomes the secondary payer. In some cases, Medi-Cal will cover Medicare Part A and B deductibles as well as co-payments and premiums. 

Medicare does not cover all medical expenses. Unfortunately, many people find out just how much it does not cover only after a major illness affects their family. For instance, after three days of hospitalization, Medicare covers the first 20 days of skilled nursing care. A copayment is instituted for days 21-100, and any nursing home care after that period is not covered. 

Medi-Cal, on the other hand, will cover necessary nursing home care that is medically needed for an indefinite period. With the average cost of nursing home care in Los Angeles, California reaching over $10,500 every month for a private room, obtaining support and protecting assets is critical. 

What Are the Eligibility Requirements for Medi-Cal?

The complicated eligibility process for Medi-Cal changes on an ongoing basis. Be sure to speak with an asset protection attorney Los Angeles when you're considering eligibility and a Medi-Cal plan. There are steps most people can take that preserve their savings while qualifying them for Medi-Cal.  

As of this writing, qualified individuals must be either disabled, blind, or 65 years of age or older. An individual may also qualify if they are under 21, pregnant, low-income with dependent children, or in a skilled nursing or intermediate care home. 

To qualify based on income, a person or family must be at or below 138% of the federal poverty level. For a family of one, this limits the income level to $17,609. 

Assets are also a consideration. Qualifying individuals may have up to $2,000 in liquid assets, and spouses may retain up to $130,380 in non-exempt assets. This spousal exemption is called the Community Spouse Resource Allowance (CSRA). 

Several assets are not considered, including the primary home, one vehicle, some life insurance policies, a burial plot, and some household goods and personal belongings.

A spouse may also retain a specified amount of income each month. Called the minimum monthly maintenance needs allowance (MMMNA), the MMMNA for 2021 is $3,260. This amount can be increased by filing for a fair hearing.

While the asset levels remain in effect, no income levels apply to seniors applying for nursing home Medi-Cal. Instead, residents are allowed to keep $35 of their income and the rest goes towards their share of cost. 

Additionally, Medi-Cal attempts to recover the amount paid out to individuals during their lifetime. Called the Medi-Cal Estate Recovery, it allows the state-federal program to recover the amount paid from the beneficiary's estate. This occurs after their spouse has passed away and includes assets that the beneficiary owned or had an interest in at the time of their passing.

While it may sound like you or your family would not be eligible or it would offer little benefit, Medi-Cal planning with an experienced living trust attorney Los Angeles can make all the difference. 

What Is Medi-Cal Asset Protection?

At McKenzie Legal & Financial, we will look at all financial matters, including assets, debts, estate plans, and insurance, and develop a Medi-Cal asset protection plan suited to your specific needs. Whether you are planning ahead or a loved one is already in a nursing home, there are steps we can take to help you and your family retain your assets. 

Medi-Cal asset protection considers how to qualify someone for Medi-Cal, how to protect their assets, how to reduce their share of cost, and how to reduce or eliminate the Medi-Cal recovery process for benefits received.

Several factors go into consideration. These include determining a qualification strategy, preparing an estate plan, and limiting Medi-Cal recovery. Planning is crucial as ineffective or incorrect steps can lead to significant tax ramifications and disqualification. They can also lead to an extended period of ineligibility. 

Some strategies that an asset protection attorney in Los Angeles may invoke include the transfer of income or non-exempt assets, gifting, the purchase of exempt assets, and income allocation. 

Financial strategies for long-term care should also include trusts with asset protection provisions and powers of attorney as well as specific beneficiary designations. 

Get Protected With Medi-Cal Today 

As is evident from the changing rules and regulations, Medi-Cal eligibility and asset protection is a complicated process. At McKenzie Legal & Financial, we are experienced elder law attorneys, knowledgeable in estate and Medi-Cal planning. 

Whether preparing a Medi-Cal Asset Protection Trust or another strategy, we’ll help you protect your family's wealth, while also ensuring you get the care you need.

Let us help you plan for your future or mitigate unexpected costs for those that find themselves in a present crisis. We will help you prepare the Medi-Cal application form and deal directly with the program on your behalf. Call us for a complimentary consultation at McKenzie Legal & Financial today.

Thomas McKenzie Law
Estate Planning Attorney in California. Full-service law firm specializing in estate plans, wills and trusts, long-term care, and financial consulting. Thomas L. McKenzie received his Juris Doctor degree from Western State University College of Law, in Fullerton, California. While working full-time at night and attending full-time daily classes, Tom graduated law school with honors in 1993.

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