Before we provide some detailed information about the Medi-Cal parameters, we should explain why this program is relevant to many senior citizens that qualify for Medicare. The United States Department of Health and Human Services maintains a website called longtermcare.gov. This site is chock-full of very useful information about living assistance for elders.
There is a particular statistic that really reaches out and grabs you when you visit the website. Researchers have found that seven out of every 10 senior citizens will eventually need help with their activities of daily living. Some can receive the assistance that they need from family members without moving, at least for a while. However, a very significant percentage of Americans will ultimately reside in nursing homes.
These facilities are extremely expensive around the country, and like most things, here in Southern California the prices are higher than the national averages. Genworth Financial consistently keeps a finger on the pulse of the state of long-term care costs, and they have found that the median charge for a year in a nursing home in our area is approximately $110,000.
The numbers have been rising year by year, so if you need long-term care in a couple of decades, you can expect the expenses to be considerably higher. Another thing to consider when you are evaluating the potential impact is the fact that your family could see two rounds of nursing home bills if you are married.
Since Medicare is a health insurance program that exists in large part to provide coverage for senior citizens, and most elders will need living assistance, you would expect Medicare to pay for it. Many people would say that it makes no sense, but in fact, Medicare does not pay for the custodial care you would receive in a nursing home.
The Medi-Cal Solution
Now we can get to the punch line: a lot of Medicare recipients ultimately seek Medi-Cal coverage because it will pay for long-term care. Of course, you are probably aware of the fact that it is only available to people with limited financial resources. As a result, there is a $2000 limit on countable assets.
That’s the bad news, but the good news is that some things that you own do not count. If you are a homeowner, your residential is not looked upon as a countable asset. In other states in the union, there is an equity limit, but at the present time, there is no equity limit in the Golden State.
Wedding rings, engagement rings, and heirloom jewelry are not counted, and evaluators do not consider household items and personal effects. One vehicle is allowed, and an applicant can have unlimited term life insurance and up to $1500 worth of whole life insurance. The same amount can be set aside for final expenses, and prepaid burial plots are exempt.
In many cases, a person will enter a long-term care facility while their spouse is still capable of independent living. Under these circumstances, the healthy spouse would be entitled to a Community Spouse Resource Allowance. This would be half of the shared assets that are considered to be countable under Medi-Cal rules.
However, there is a limit of $126,420. In addition to this, if the healthy spouse is relying on income that is earmarked for the institutionalized spouse, a Monthly Maintenance Needs Allowance can be approved. The maximum allowance is $3161 per month in 2019.
What do you do about the assets that you have after you have exhausted all of your exemptions? The answer is that you could give gifts to your loved ones, which would essentially be advance inheritances.
This is often done, but you have to be cognizant of the 30 month look back period that we have here in California. You have to complete all divestitures at least 30 months before you submit your application, and if you violate this rule, you are penalized and your eligibility is delayed.
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