Many people are surprised to hear that Medicare does not pay for a stay in a nursing home or assisted living facility, and it does not cover professional in-home care. Medi-Cal will pick up the tab, but since it is a need-based program, it takes careful planning to obtain eligibility.
Medi-Cal Asset Limits
The Medi-Cal limit on countable assets is $2000, and that can sound like an absolute dealbreaker, but some things that you own do not count. Your home is not a countable asset, and there is no equity limit at the present time.
This no-limit provision is a break for Californians, because other states do in fact have equity limits that apply to Medicaid eligibility.
You can retain ownership of your personal belongings, your household items, and your wedding and engagement rings. If you have heirloom jewelry, this would be exempt, along with one motor vehicle.
Prepaid burial plots are permissible, you can have as much is $1500 saved for burial or cremation expenses. The same amount of whole life insurance is allowed, and there is no limit to the amount of term life insurance that you can carry.
Provisions for the Healthy Spouse
Now we can hone in on the specific point of this post. In a lot of cases, one person will require nursing home care while their spouse is still capable of independent living. Under these circumstances, the spouse is entitled to a couple of different allowances.
One of them is the Community Spouse Resource Allowance. (In Medi-Cal lingo, the healthy spouse is referred to as the “community spouse.”) This is equal to half of the shared assets that are considered to be countable for Medi-Cal eligibility purposes.
That’s the good news, but the bad news is that there is a limit. In 2020, it stands at $128,640. In many states, there is a minimum amount that a healthy spouse can keep even if it is more than half of the community assets, but there is no minimum in California.
The other allowance is the Medi-Cal Monthly Maintenance Needs Allowance. This gives the healthy spouse the ability to continue to receive income that is earmarked for the spouse that is in a nursing home. Under other circumstances, almost all of the income would go toward the cost of the care that is being received.
However, the healthy spouse cannot necessarily keep all of the income. The limit this year is $3216, but there are adjustments made for inflation each year. As a result, the figure will be a bit higher next year. This also applies to the Community Spouse Resource Allowance.
Spending Down to Qualify for Medi-Cal
People typically “spend down” their countable assets to qualify for coverage to pay for long-term care. This can describe the process of actually spending all of your resources, but many people will simply give gifts to loved ones who would be inheriting the assets anyway.
Timing is key, because there is a 30 month look back period in California. Gift giving must be completed at least 30 months before you submit your application for coverage.
This may seem problematic, but you simply have to act in advance, and we can help you do it correctly. Actually, the 30 month look back is a break, because the Medicaid look back is 60 months in every other state in the union.
Schedule a Consultation Today!
If you are ready to construct a holistic plan for aging that includes a nursing home asset protection component, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 310-337-7696.
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