Before we get into the changes that have been made to the Medi-Cal parameters for 2020, we should explain why this program may be important to you at some point in time.
The vast majority of senior citizens will qualify for Medicare when they reach the age of eligibility, which is 65 at the time of this writing. Simply put, if you have worked and paid taxes for at least 10 years, you will qualify for Medicare coverage.
That’s the good news, but the bad news is that Medicare does not cover all of your health care needs in full. There are co-payments, deductibles, and monthly premiums that must be paid out of your own pocket. You should certainly gain an understanding of these expenses so you can budget accordingly when you are looking ahead toward your retirement years.
Long-Term Care
In many instances, these costs will be manageable, but there is one gap in the coverage that many people simply cannot cope with comfortably. Medicare does not pay for living assistance that is considered to be long-term custodial care. This is the type of care that you would receive in a nursing home or some other type of assisted living facility.
If you are thinking that it is unlikely that you will ever need this form of care, the statistics tell a different tale. The majority of senior citizens will need some form of help with their activities of daily living, and about 35% of elders will eventually reside in nursing homes.
Paying out-of-pocket is not a very pleasant proposition. You can expect to pay over $100,000 a year for a private room in a nursing home, and it could be considerably more depending on the facility and its exact location. The average length of stay is in fact one year, and married couples have to be prepared for two different rounds of nursing home costs.
Medi-Cal Can Help
Now we can get to the point of this blog post. Medi-Cal is another federal/state government funded health insurance program that does pay for long-term care if you can gain eligibility. Since it is a need-based program, there is an asset limit of just $2000, but some things do not count.
Your home is not a countable asset, but in other states in the union, there are equity limits. Here in California, we do not have any equity limit at the present time. In addition to the home, you can maintain ownership of your vehicle and other personal belongings.
If you are married and you need long-term care, but your spouse can still live independently, your partner would be entitled to a Community Spouse Resource Allowance. This is equal to half of the assets that you own together as a couple, but there is a limit. An inflation adjustment has been added for the 2020 calendar year, bringing the limit up to $128,640.
Generally speaking, income that is brought in by the spouse that is in a nursing home must be used to defray the cost of the care that is being received. However, this requirement is waived if the healthy spouse is relying on the income. The rules allow for a Monthly Maintenance Needs Allowance, and the maximum in California in 2020 is $3216 a month.
Schedule a Consultation Today!
If you would like to discuss Medi-Cal planning or any other elder law or estate planning matter with a knowledgeable attorney, our firm would be more than glad to help.
We will gain an understanding of your situation and explain your options to you. Ultimately, if you decide to move forward, we can help you put a comprehensive plan in place. To set the wheels in motion, send us a message or give us a call at 310-337-7696.
Cesar has received his Masters of Science in Integrated Design, Business and Technology from the University of Southern California.
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