In simple terms, Medicaid is a need-based medical assistance program. As such, eligibility is based entirely on income and financial need, regardless of age. The cost of health coverage is paid with federal, state and local tax funds. Patients with Medicaid normally pay a small co-pay, if anything at all. Because Medicaid is run by each state, the benefits and eligibility requirements are different from state to state. When it comes to Orange County Medi-Cal planning, you need experienced attorneys to help guide you through.
How do I apply for Medicaid in California?
California’s Medicaid program, Medi-Cal, provides free or low-cost health care coverage for California residents who are deemed eligible. California’s State-based Marketplace is called “Covered California.” Beginning January 1, 2014, California expanded Medi-Cal eligibility for low-income adults. The Medi-Cal program offers 21 different health plans for managed care, and the options that are available depend on the county in which you live.
Eligibility and asset transfers
Medicaid is, what is known as, a “payer of last resort.” This means that all other sources of payment for an applicant’s medical care must be exhausted before Medicaid will begin to pay for long-term care expenses. If you give away any of your property or assets shortly before applying, you may be ineligible for long-term care benefits for a five-year period after your application is accepted.
What is the Five-Year Medicaid Look Back period?
If you are considering applying for Medicaid, there are a few things you should know about the eligibility requirements. One important aspect is often referred to as the “five-year look-back period.” This penalty period applies when an applicant is seeking long-term care coverage. This part of the eligibility process can lead to a delay of benefits if you are not careful.
The timing of property transfers is important
In determining whether this penalty period applies to you, the Medicaid agency will scrutinize any transfers you made during the five years prior to your application, no matter how well-intentioned they may have been. However, if you need acute health care, such as hospital or physician services, you may still be eligible to receive those benefits. If you have questions about this, let our Orange County Medi-Cal planning attorneys help.
How does the Medicaid spend down process work?
Low-income individuals may be eligible for health care assistance, through Medicaid, 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 Medicaid’s spend down rules. If you are able to “spend down,” or deduct your medical expenses from your income, you may be eligible for Medicaid. So, how does the Medicaid spend down process work?
The Medicaid spend down process
In order to qualify for the Medicaid 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 Medicaid, 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.
Using a Medicaid Trust for Orange County Medi-Cal planning
A Medicaid Trust is a special type of trust meant to protect your assets so that you can qualify for Medicaid to pay nursing home costs. This way you do not have to spend everything on long-term care. A Medicaid Trust is like other irrevocable trusts. The difference is, the grantor can be the actual beneficiary. Your spouse and children would be the residual beneficiaries. So, as the grantor, you receive income from the trust, up to the maximum amount allowed by Medicaid in order to retain eligibility for benefits.
Limitations and requirements are subject to change
Medicaid’s 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 Medicaid office at least once a year. Also, before your initial application, you should consult with your Medicaid 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 Medicaid. 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.
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