In the State of California, the average cost of a year in long-term care (LTC) is over $100,000 for 2017. For many seniors, Medi-Cal, California’s Medicaid program, is the only hope for help paying for the high cost of nursing home care. If you are a senior faced with the prospect of paying for LTC for yourself or a spouse, one of your biggest fears is probably the commonly held belief that to qualify for Medicaid you will have to give up your home or other valuable assets. The good news is that your home is usually an exempt asset for purposes of determining your initial eligibility for Medi-Cal benefits. The bad news is that the Medicaid Estate Recovery Program (MERP) could still be a threat to your home after your death. Fortunately, careful Medi-Cal recovery avoidance planning can eliminate that threat.
What Is the Medicaid Estate Recovery Program?
If you qualify for Medi-Cal benefits, the program will pay the majority of your long-term care expenses for as long as you remain eligible for benefits. Given an average length of stay of 2.5 years, the average LTC bill in California runs over $250,000. In an effort to recover some of the funds spent on LTC costs, Medicaid is allowed to pursue claims against the estate of a program beneficiary after his/her death. In the same manner as other creditors, Medi-Cal simply files a claim against the estate during the probate of the estate. Understandably, most people would prefer not to see their estate assets lost to a Medicaid claim when those assets were intended to be passed down to loved ones.
Limits to Medi-Cal Recovery
Although Medicaid has long been allowed to pursue the recovery of funds spent on a program participant, there have also been some limits to what Medicaid could recover. Traditionally, for example, Medicaid had to wait until the death of a surviving spouse to pursue a claim against your home, and was precluded from recovery altogether if you were survived by a disabled child living in the home. Legislation went into effect on January 1, 2017 that further restricts Medi-Cal’s ability to recover from the estate of a decedent.
The new law prevents Medi-Cal from recovering from your estate if you are survived by a spouse or domestic partner as well as excluding homes of “modest value” from recovery efforts without regard to survivors. One of the most favorable aspects of the new law, however, is that Medi-Cal is now only allowed to pursue recovery of probate assets. In other words, assets you own at the time of your death that are non-probate assets are protected from the Medicaid Estate Recovery Program. Assets held in a trust are an excellent example of non-probate assets that would be outside of the reach of Medi-Cal recovery.
The new Medi-Cal recovery rules can go a long way toward protecting and preserving your assets so they may be passed down to loved ones; however, careful estate planning remains essential to ensure that your estate assets are safe from the Medicaid Estate Recovery Program.
Contact the Los Angeles Medi-Cal Attorneys at Schomer Law Group Today!
At Schomer Law Group, we are committed to helping you protect your assets both now and after you are gone. Contact the Los Angeles, California office today by calling (310) 337-7696 or (562) 346-3209 or by filling out our online contact form.