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Medi-Cal Planning

What is Medi-Cal Planning?

Medi-Cal planning is the process of protecting, purchasing, transferring and/or liquidating a person’s assets to help them qualify for Medi-Cal benefits. Medi-Cal will cover the cost of a skilled nursing facility for long-term care, at-home care, prescription pills, physical rehabilitation, and many other costly healthcare services. Senior care can quickly eat up a person’s life savings and add undue stress to an already difficult and stressful situation. At Elder Law Services of California, our goal is to ease the process of aging by helping to protect their assets and qualifying people for the benefits they need.

Just because a person has property, assets or savings does not disqualify them from receiving Medi-Cal benefits. Due to changes in federal laws enacted in 1996, almost anyone can be approved under Medi-Cal’s eligibility limits. Our team works within the Medi-Cal rules and regulations to help qualify 99.99%  of our clients.  The planning and qualification process may be different for one individual or family to the next, as it depends on your own personal set of circumstances and objectives. However, our team will formulate a plan to get you qualified without having to waste your assets and life-earned savings.

Medi-Cal rules are very complex and change every year. An improper transfer of assets may result in an ineligibility period of up to 5 years. The most prudent way to qualify for Medi-Cal is by consulting with a qualified professional before attempting to start the process yourself. Protecting your assets can be one of the most important things to do during your golden years and our team of qualified experts is here to help.

How do I qualify for Medi-Cal?

The Medi-Cal program requires an individual to have less than $2,000 in countable assets—which do not include, a home, vehicle, jewelry, and other personal property that are considered exempt for Medi-Cal planning purposes. The biggest question for people who do have more than $2,000 in assets is how to qualify for Medi-Cal without suffering a disqualification?

While technically you can gift away property, Medi-Cal will look back 30 months’ into a person’s financials and any gifts or transfer of assets will result in an ineligibility period for the applicant. Penalties for any legal transfers of assets can range from one month to 30 (or more) depending on the situation. The key for creating a smooth transition into Medi-Cal is to consult with an experienced elder law attorney and have them help you make those transfers while staying within the specific details and rules of the Medi-Cal system and bypass any penalties.

How to Avoid the Medi-Cal Recovery

Medi-Cal laws and regulations are a complicated matter and can change at any moment. It can leave beneficiaries confused about their rights. Many people may have heard horror stories about the State of California making a claim on a deceased beneficiary’s home and assets, and that thought alone could be enough to dissuade a person from using Medi-Cal as a long-term care option. However, if a Med-Cal beneficiary has the right set of advisors, the process of estate recovery can be avoided entirely.

My Home is an Exempt Asset - Do I still need to protect my property?

A home is generally accepted as an exempt asset and therefore not counted in determining long-term care Medi-Cal eligibility. A Medi-Cal applicant must show that the home in question is their principal residence and also state an intent to return to the home when healthy. Mobile homes, houseboats, or an entire multi-unit dwelling (as long as any portion serves as the principal residence of the applicant) are all considered to be exempt assets in the Medi-Cal qualification process.

Although your home may be an exempt asset when applying for Medi-Cal benefits, without proper planning, upon death, the decedent’s estate or any recipient of the decedent’s estate may have to pay the costs of care back under federal and state law. Repayment will come from the assets of the deceased Medi-Cal beneficiary and will not exceed the asset value. With proper planning, all of this can be completely avoided.

When Should I Begin Medi-Cal Planning?

It is never too early to begin the steps for Medi-Cal planning for the future of yourself, your family members, or loved ones. It can, however, be too late depending on the emergency situation and any laws that may pass in the future that can prevent one from effective long-term care planning. The future of long-term care in America is heading for a real crisis.

According to the 2012 Social Security Fiscal Report, 76 million Americans will turn 65 from 2007-2027 (approximately 10,000 every day). Of those, 70% will require some form of long-term care in their lifetime. That’s 53.2 million long-term care patients.

Half of those (26.6 million people) will need care that will last for more than one year. The 2009 National Nursing Home Survey reports that the average patient stays in a long-term care facility for approximately 30 months. Average monthly costs for a Nursing home can start from $8,000, and up to of an excess of 20,000 just to get the care they need.

Our prediction is that Medi-Cal will not be around to pay for long-term care once the baby boomers start to reach nursing home age. Studies show that the overwhelming majority of baby boomers have not saved enough for their retirement. Although unfortunate, most Baby Boomers are counting on their inheritances for their retirement, but if a catastrophic illness or disease or accident requires a parent to receive long-term care, there may not be anything left in parent’s estate to inherit.

Let’s Begin Today

Under current California law, anyone can legally protect their homes and still qualify for Medi-Cal, BUT THEY MUST ACT SOON. The Medi-Cal rules must and will change. Once California implements the federal guidelines, people will have to tap into their home equity in the form of reverse mortgages to pay for long-term care.

That’s why making sure to plan for the future is so important, through creating estate planning and asset protection documents with languages to ensure your appointed agents can plan for your future in the event you become incapacitated.

If you are interested in learning more or getting the Medi-Cal qualification process started, give us a call at  (855) ELDER LAW or (855) 353-3752 for a FREE consultation today! Our team of expert Medi-Cal attorneys are ready and waiting to help you with a plan for the future.