Government benefits programs, which are based on need or income, have certain eligibility requirements. Since these benefits are reserved only for those who need assistance, there are certain limits to the amount of income or assets that a person can have, in order to be qualified. Medi-Cal is no exception.
What type of program is Medi-Cal?
The purpose of Medi-Cal is to provide assistance to low income individuals and families in paying for medical care. The program operates on both state and federal funds. Medi-Cal is not the same as Medicare, which is a federal health insurance program for the disabled and individuals age 65 and older.
Instead of making payments for medical care or expenses to you directly, the physicians, hospitals and other medical care providers, who are enrolled in the Medi-Cal program, are paid on your behalf. Medi-Cal does not pay all medical bills. Some adults receiving Medi-Cal are still required to pay a portion of their medical expenses.
How do you qualify for Medi-Cal?
Most states offer coverage for adults with children below a certain income level, pregnant women, certain seniors, and people with disabilities. The Affordable Care Act of 2010 established a national minimum eligibility level for Medi-Cal, which went into effect on January 1, 2014. The maximum assets for Medi-Cal is 133% of the federal poverty level . For a family of four, that would equate to $31,720.50.
California’s Medi-Cal program is called Medi-Cal and it offers free or low-cost health coverage for California residents who meet certain eligibility requirements. Beginning January 1, 2014, California will expand Medi-Cal eligibility for low-income adults. The Medi-Cal program offers 21 different health plans for managed care. The options vary depending on the county you live in.
Giving away your assets
A common misconception is that you can simply give away assets in order to become eligible for Medi-Cal. Medi-Cal agencies frown upon people who give away their assets before applying for Medi-Cal, because those assets could have been used to pay for their own care. It all depends on the timing. If you transfer your assets within five years of applying for Medi-Cal benefits, Medi-Cal will likely withhold your benefits. This period of ineligibility is known as the “penalty period.” The length of the period depends on the amount of assets transferred.
Can a Medi-Cal Trust help?
A Medi-Cal Trust is a special type of trust meant to protect your assets so that you can qualify for Medi-Cal to pay nursing home costs. This way you do not have to spend everything on long-term care. A Medi-Cal 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 Medi-Cal in order to retain eligibility for benefits.
If you have questions regarding Medi-Cal, or an estate planning needs, please contact the Schomer Law Group either online or by calling us at (310) 337-7696.