Low-income individuals may be eligible for healthcare assistance, through Medi-Cal, if they are “medically needy.” That means the individual’s resources must not exceed the maximum resource amount allowed in their state. If, by chance, that individual’s income exceeds that amount, they may still be eligible, through Medi-Cal spend down rules. If you are able to “spend down,” or deduct your medical expenses from your income, you may be eligible for Medi-Cal. So, how does the Medi-Cal spend down process work?
The Medi-Cal spend down process
In order to qualify for the Medi-Cal Spend Down, you need to show you are spending a large part of your money on medical care. In other words, you establish that you are “medically needy.” If that is the case, and your income exceeds the income limits to generally qualify for Medi-Cal, then you can deduct the cost of your outstanding medical expenses from your income, in order to qualify. Once eligible for spend down, you are required to re-enroll every three months.
How does Medi-Cal determine your resources?
Medi-Cal will divide your assets into two categories, when evaluating eligibility – countable assets and exempt assets. Countable assets are those assets that are required for your care, prior to receiving Medi-Cal. Exempt assets are those assets that are not considered by Medi-Cal for providing care, but may be subject to recovery after your death.
Income limits for single and married individuals
A single individual is allowed to have up to $2000 in cash and investments, as well as a primary residence, if they plan to return to it. If the single individual is living in a nursing home, she is allowed to retain $35 of income per month for personal use, with the rest of the income being applied to the cost of her medical care.
For those who are married, the countable assets are different. The well spouse who lives at home will be able to keep the home, one car, his or her personal property, and approximately $100,000 (depending on the state’s current limits) in cash and investments. The well spouse is also given a portion of the couple’s monthly income.
Limitations and requirements are subject to change
Medi-Cal income limitations and eligibility requirements are subject to change every year. For this reason, it is crucial that you confirm the current requirements with your county Medi-Cal office at least once a year. Also, before your initial application, you should consult with your Medi-Cal planning attorney for advice on how to convert your countable assets to exempt assets. Your attorney can also help you take steps to protect your assets from recovery after your death, with appropriate estate planning techniques.
Common methods for preserving your assets
There are several useful strategies for protecting as much of your personal assets as legally possible, when you are applying for Medi-Cal. Essentially, the goal is to preserve your countable assets by spending them on exempt assets, such as prepaying funeral expenses, paying off a mortgage, making home repairs and updating home furnishings and appliances, replacing an old automobile, paying for more care at home, and buying a new home.
If you have questions regarding Medi-Cal spend down, or any other Medi-Cal planning issues, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.