Understanding that eligibility for Medi-Cal will impose limitations on the total value of countable assets and that even exempt assets may be subject to recovery by Medi-Cal after the death of the recipient, many clients wonder whether they will be able to keep or sell their homes after a spouse receiving Medi-Cal benefits passes away. If you are faced with this situation, discuss your options with one of our Orange County elder law attorneys.
What is Medi-Cal?
Medi-Cal, California’s state Medi-Cal program, is funded by both federal and state funds. There are several different methods for obtaining eligibility for Medi-Cal. There are also eligibility rules specifically for long-term care services like nursing homes, assisted living facilities, and home healthcare services. The California Department of Health Care Services (DHCS) administers long-term care programs in California.
How Medi-Cal determines countable assets
In evaluating an applicant’s eligibility for Medi-Cal, your assets will be divided into two categories: countable assets and exempt assets. Countable assets are those assets that are necessary for your care, prior to receiving Medi-Cal benefits. Exempt assets are those assets that are not considered or counted by Medi-Cal as necessary for providing care. Again, exempt assets may be subject to recovery after your death.
What are a spouse’s rights when a Medi-Cal recipient dies?
Consider a married couple with one spouse spending time as a resident in a nursing home, with those expenses being covered by Medi-Cal. When that ill spouse passes away, the surviving spouse may want to sell the family home in order to live closer to family. This is a common situation and many Orange County elder law attorneys are asked whether the surviving spouse has the right to sell the home.
Generally speaking, if spouses own their home as joint tenants or as tenants by the entirety, which is common, then the house will belong to the surviving spouse and not be subject to recovery by Medi-Cal. Consequently, the surviving spouse can sell the house and use the proceeds as he or she sees fit. If you are not sure of the status of your ownership, discuss your situation with one of our Orange County elder law attorneys.
Can I give away my assets?
A very common misconception is that you can simply give away your assets in order to become eligible for Medi-Cal. Actually, Medi-Cal has a problem with people giving away their assets in anticipation of applying for benefits. This is because those assets could have been used to pay for their own medical care. That does not mean you cannot give anything away. It all depends on the timing. If you transfer your assets within five years of applying for Medi-Cal benefits, your Medi-Cal benefits will likely be withheld. This period of ineligibility is known as the “penalty period,” and the extent of that period depends on the value of the assets transferred.
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 healthy 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 healthy spouse is also given a portion of the couple’s monthly income.
Limitations and requirements may change
Medi-Cal’s income limitations and eligibility requirements are subject to change every year. For this reason, it is crucial that you confirm the current requirements at least once a year. Also, before your initial application, you should consult with one of our Orange County elder law attorneys for advice on how to convert your countable assets to exempt assets. Our attorneys can also help you take steps to protect your assets from recovery after your death, with appropriate estate planning techniques.
Preserving your assets when applying for Medi-Cal benefits
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 or any other elder law issues, please contact the Schomer Law Group for a consultation, either online or by calling us at (310) 337-7696.