Eligibility for Medi-Cal benefits requires that you have a limited amount of countable assets. Even so, exempt assets may be subject to recovery by Medi-Cal after the death of the recipient. For these reasons, many clients are concerned about Medi-Cal asset protection and particularly 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, the Schomer Law Group is here to help.
Understanding the Basics About Medi-Cal, California’s Medicaid Program
Medi-Cal is California’s state Medicaid program and it 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 Does Medi-Cal Determine What My Countable Assets Are?
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 My Rights as a Spouse of a Medi-Cal Recipient?
It is quite common for married couples to have one spouse as a resident in a nursing home. When that spouse is receiving Medi-Cal benefits, questions arise about the rights of the healthy spouse when it comes to Medi-Cal asset limitations. If the spouse receiving Medi-Cal benefits passes away, the surviving spouse may want to sell the family home in order to live closer to other family members. This is a common situation and we are often 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 Medi-Cal 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. However, this is a situation that our Medi-Cal attorneys can help you deal with.
Income Limits For Single and Married Individuals
A single individual is allowed to have up to $2,000 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.
Medi-Cal Limitations and Requirements are Subject to 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 the Schomer Law Group 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.
Medi-Cal Asset Protection
There are several useful strategies for Medi-Cal asset protection so that you can protect 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.
Join us for a free seminar today! If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209.
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