I’ve heard about Medi-Cal planning but is it really legal…?

This is such a common question! We try not to be offended by it, because of course we would never do anything that is illegal or unethical. But we do understand that you don’t know us (yet) and may not be aware of our honesty, high ethics and good moral character. For more on our personal mission to help seniors, click here for “Christina’s Story.” But back to the question:

There are a couple reasons why Medi-Cal planning is still something you may not have heard much about. First, the strategies for Medi-Cal planning have changed a lot over the years. In the 1980s, spending down your estate was really the only option and lawyers weren’t very involved. It was really only those with really large estates that were doing any kind of planning. As time passed, those qualifying for Medi-Cal started giving their assets to their children for safekeeping, essentially, and this strategy worked for a long time. But when the economy crashed in 2009, many aging parents saw their children use and spend their money out of what they saw as necessity to save their own homes when they were struggling. Thus the strategy for gifting to adult children became less attractive and lawyers started to look at what else would be possible. Then lawyers realized that the strategies used for very wealthy clients to preserve their estates could also be used for smaller estates to qualify for Medi-Cal, and a somewhat new area of law was born. Because it’s rather new and the rules are so complex, most lawyers either don’t know about it or choose not to handle benefit planning. But not knowing about it doesn’t mean there’s anything untoward or unethical or illegal about it!

But you may still be wondering how all of this is legal, especially if you’ve never heard that there are ways to qualify for Medi-Cal if you have more than the maximum income and assets. We’ll return to the tax analogy that’s already served us: One way to understand is to think about the income tax return you file every year & the income tax you pay. We have in our society certain resources, such as accountants/CPAs (and bookkeepers!), and programs such as TurboTax that help us to reduce the taxes we would otherwise pay without these resources. Just think of what we would do if all we had was an IRS tax return form and the IRS instructions to file our taxes, and no help from anyone or anywhere?! Indeed, the government/IRS is not going to come to us with tips and assistance for us on how to reduce our taxes! It is up to the CPAs to review the tax code and its changes and inform us of ways we can lower our tax obligation. In fact, in law school I learned that there is a court case whose specific holding was an explicit right for Americans to do all they can (within the limits of tax and other laws) to reduce our tax payments. We have the right to do this, which you may not know, but strategies to reduce taxes are much more well-known because we all pay taxes (and want to reduce them!). The Medi-Cal benefit and application are as complex as a tax return. But in contrast to tax strategies, Medi-Cal is not only not well-known, but the resources to help seniors remain lean and hard to find. But that doesn’t mean they’re untested or unethical or illegal. Just like with reducing taxes, we’re carefully examining and evaluating all of the rules and regulations, abiding by them, and taking advantage of the options and opportunities available to us within the confines of these rules and regulations. We do nothing that’s remotely illegal and have very high ethical standards that we maintain.

Want more information? Get in touch! We’d be happy to help you & your family.

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Why do I need Medi-Cal for nursing home care? Doesn’t Medicare pay for that?

Medicare and Medi-Cal are different governmental programs, both of which can be used to pay for nursing home care. Medicare is health insurance that is federally-funded and available to those 65 and over or are disabled. There are no income or resource requirements for Medicare. Medicare will pay for up to 20 days of skilled nursing home care after three days of hospitalization. Medicare will also pay for additional nursing home care days past day 20, up to a limit of 100 days, with a daily co-pay and only if the individual continues to show improvement in the condition that sent them to nursing care. Anyone in skilled nursing home care past 100 days must either pay on their own for the care (“private pay”) or apply for Medi-Cal. Once approved, Medi-Cal will pay for skilled nursing home care indefinitely, regardless of whether the patient improves or not. Monthly expenses for skilled nursing home care averages around $8,000 monthly in California, but very often in practice can cost between $10-15,000 monthly.

If you think it’s confusing, you’re not alone. Getting older is not for the weak! We’d love to help you out if you need more information. Give us a call or schedule a free consultation today!

If I’m already receiving Medi-Cal for nursing home care, can I still do planning or is it too late?

It’s never too late to talk about planning! We may be able to reduce or eliminate your share of costs as well as protect your assets from Medi-Cal recovery once you’ve passed. Also, new laws can make it easier to plan.

The good news is that there’s hope, and there’s help. Give us a call at 925.307.6543 or click here to make an appointment directly using our online scheduling. We have offices all over the Bay Area for your convenience, with our main office in Dublin and satellite offices in Oakland, Walnut Creek, San Francisco, San Mateo, Palo Alto, Sunnyvale, San Rafael and Antioch.

Not ready to make an appointment? We offer a complimentary analysis of your situation for Medi-Cal eligibility. If you download and fill out this form, we will get back to you within 48 hours with a preliminary report on how we can help you qualify for Medi-Cal benefits. Click here to get our FREE Medi-Cal Eligibility Form.

Income and assets requirements to qualify for Medi-Cal nursing home care in California…& how to qualify & keep your assets (yes, KEEP your assets)

To qualify for Medi-Cal, one must not have more than $2,000 of countable assets and $35 in income each month. But this rather scary figure leaves out the rest of the story, which is considerably less frightening.

First, the asset rules. The $2,000 limit is for “countable” assets only, and countable assets do not include your home (and furnishings/contents within your home), your car, your retirement (IRA, 401k – though there are special rules for these so don’t ever assume you can properly plan on your own with an article about Medi-Cal basics) and certain other assets. In addition, if you are married, your spouse can keep up to $119,220 (in 2016) in countable assets.

In terms of income, the spouse of a married applicant can keep ALL income in his/her name and can even receive income from the Medi-Cal applicant spouse if the well spouse’s income is below about $3,000. The rest of the income of the applicant spouse goes towards their “share of costs” for the nursing home care, and is likened to a copay or deductible.

But that’s not all. First, there are legal ways to transfer your assets to protect them, in effect keeping more than the stated limits (there are pros and cons to these kinds of arrangements, but my clients pretty uniformly consider the cons to be far less difficult than paying $10,000 or more a month on nursing home care). This kind of Medi-Cal planning is quite common even though it’s not very well known. In addition, it can be possible to ask the court to increase the limits in certain situations. There are a lot of available options for qualifying for Medi-Cal if you have more than $2,000 in assets – or more than $119,220 – even if your assets and estate are substantially more than these limits.

Give us a call at 925.307.6543 or click here to make an appointment directly using our online scheduling. We have offices all over the Bay Area for your convenience, with our main office in Dublin and satellite offices in Oakland, Walnut Creek, San Francisco, San Mateo, Palo Alto, Sunnyvale, San Rafael and Antioch.

Help! Dad is being released from the hospital & they say he has to go to a nursing home. What do I do?

It can be easy to panic in this situation and not know where to turn or what to do. Information is tough to get (and confusing when you find it) and it seems like this would be a common-enough situation that help would be on every corner. Sadly, this isn’t the case, despite some wonderful organizations and resources out there trying to get the word out about what to do and where to find help. Things are improving, but it’s slow.

Anyway, there is a lot to do and you should move as quickly as you can to take advantage of the time you do have to be sure you make the right decisions. Making decisions in a panic often leads to mistakes you wish you could take back. Your first decision will be placement, and you should be looking at quality of the nursing home and location. You probably want your loved one close to you and/or close to home. Obviously you have to go where there’s availability. There are placement services that can help you find the best place for your family. The next question (and really it’s a concurrent question since you unfortunately should be doing this at the same time) is how to pay for the care. Medicare will probably pay for some of the care, but Medicare maxes out (i.e. stops paying) at 100 days of nursing home care, so you don’t have a lot of time to figure out what to do. Instead of resigning yourself to depleting the hard-earned assets of a lifetime to pay for the care, look into Medi-Cal and Medi-Cal planning. We can help. Often we can preserve much if not most of your estate for your family and future.

The good news is that there’s hope, and there’s help. Give us a call at 925.307.6543 or click here to make an appointment directly using our online scheduling. We have offices all over the Bay Area for your convenience, with our main office in Dublin and satellite offices in Oakland, Walnut Creek, San Francisco, San Mateo, Palo Alto, Sunnyvale, San Rafael and Antioch.

Not ready to make an appointment? We offer a complimentary analysis of your situation for Medi-Cal eligibility. If you download and fill out this form, we will get back to you within 48 hours with a preliminary report on how we can help you qualify for Medi-Cal benefits. Click here to get our FREE Medi-Cal Eligibility Form.

Will I lose my home if I have to go on Medi-Cal for nursing home care?

Good news!

If you plan properly, then no. During your life, your home is exempt and the state will only try to recoup the money it spent on nursing home care after you have passed away (and if you’re married, until your spouse has passed away). But if you do proper planning, you can protect your home from Medi-Cal estate recovery.

For more information, see our “MediCal FAQs,” to the left.

How to qualify for Medi-Cal in California and stop paying for nursing home care

If you’re privately paying for nursing home care in California, then it’s because you haven’t taken advantage of the opportunity to plan, protect your assets and estate, and qualify for Medi-Cal. Medi-Cal is a middle class program to help pay for the astonishing costs of nursing home care in California. The average cost of nursing home care is officially a little more than $7,000 monthly in California, but this figure is for standard care, and most nursing home residents require care in addition to the standard care, and much like the inflated costs of snacks at a movie theater or meals at a hotel restaurant, the additional care often has a high price tag. The average cost of nursing home care in California is likely closer to $15,000 or more a month. How many of us have an extra $15,000 a month to spend on care, usually at around age 80? Not many, I’d guess, which is why we have Medi-Cal.

Medi-Cal looks at assets and income to determine eligibility to qualify for benefits, and the rules are both intricate and complex. As an analogy (and if you know me, you know I love tax analogies), qualifying for Medi-Cal is a little like how to save money on your taxes: it depends a lot on your situation and there may be a lot you can do to improve your financial situation. What I recommend is at least looking in to whether you could qualify or not – what do you have to lose, other than paying $10,000 a month?

We offer a complimentary analysis of your situation for Medi-Cal eligibility. If you download and fill out this form, we will get back to you within 48 hours with a preliminary report on how we can help you qualify for Medi-Cal benefits. Click here to get our FREE Medi-Cal Eligibility Form.

Understanding the Medi-Cal “look back” and penalty periods in California for nursing home care?

This is some of the most confusing and misunderstood aspects of Medi-Cal and benefits for California skilled nursing home care: the look back and penalty periods. First, the look back is the time period, immediately prior to your Medi-Cal application, that Medi-Cal will examine your financial transactions in determining eligibility for benefits. So if you apply today, they will only be looking at the transactions (i.e. gifting your assets) for the last 2 ½ years. Part of the confusion is that most of the rest of the country’s Medicaid has a look back period of 60 months, or 5 years. Further compounding the problem is that the law in California provides for a 60-month look back, but we don’t do that. Medi-Cal looks back 30 months from the time of application.

Okay let’s put down the idea of a look back and talk about a penalty period. Again, this is a problem because most of the rest of the country does this much differently, so it’s tough to get accurate information for California. But in California, a transaction/transfer of assets for less than fair market value, for the purposes of qualifying for Medi-Cal benefits, that happens in the 30 months prior to the individual’s application to Medi-Cal, may be subject to a penalty period. The penalty period is the time in which the applicant is ineligible to apply for Medi-Cal benefits. As an example, if I gave my daughter $5,000 last week because I wanted to “spend down” my estate to qualify for Medi-Cal, then Medi-Cal will look at that transfer (because it’s last month and within the 30 month look back period) and assess a penalty for it. The penalty periods are calculated based on the market value of the transaction ($5,000 here) and the average private pay rate. This calculation is somewhat complex, and the rules rather unusual, so I won’t get into the detail here, but this is the opportunity we have for planning. In many cases we can structure gifting so that any penalty period is not more than a month or so. If you don’t understand the rules, it can be easy to mess this up and cause a lengthy penalty period that’s unnecessary. This is why planning is so critical – the rules are complex and detailed, but there is a right way to plan to be able to save you and your family money, time and preserve your estate and legacy.

Use the link at the right to schedule your FREE appointment with us at one of our nine Bay Area locations.

I’ve heard about Medi-Cal planning but it doesn’t seem legal & I’ve talked to lawyers who don’t even know about it. Is this really real?

This is such a common question! We try not to be offended by it, because of course we would never do anything that is illegal or unethical. But we do understand that you don’t know us (yet) and may not be aware of our honesty, high ethics and good moral character. For more on our personal mission to help seniors, see “Christina’s Story.”

There are a couple reasons why Medi-Cal planning is still somewhat unknown. First, the strategies for Medi-Cal planning have changed a lot over the years. In the 1980s, spending down your estate was really the only option and lawyers weren’t very involved. It was really only those with really large estates that were doing any kind of planning. As time passed, those qualifying for Medi-Cal started giving their assets to their children for safekeeping, essentially, and this strategy worked for a long time. But when the economy crashed in 2009, many aging parents saw their children use and spend their money out of what they saw as necessity to save their own homes when they were struggling. Thus the strategy for gifting to adult children became less attractive and lawyers started to look at what else would be possible. Then lawyers realized that the strategies used for very wealthy clients to preserve their estates could also be used for smaller estates to qualify for Medi-Cal, and a somewhat new area of law was born. Because it’s rather new and the rules are so complex, most lawyers either don’t know about it or choose not to handle benefit planning. But not knowing about it doesn’t mean there’s anything untoward or unethical or illegal about it!

But you may still be wondering how all of this is legal, especially if you’ve never heard that there are ways to qualify for Medi-Cal if you have more than the maximum income and assets. We’ll return to the tax analogy that’s already served us: One way to understand is to think about the income tax return you file every year & the income tax you pay. We have in our society certain resources, such as accountants/CPAs (and bookkeepers!), and programs such as TurboTax that help us to reduce the taxes we would otherwise pay without these resources. Just think of what we would do if all we had was an IRS tax return form and the IRS instructions to file our taxes, and no help from anyone or anywhere?! Indeed, the government/IRS is not going to come to us with tips and assistance for us on how to reduce our taxes! It is up to the CPAs to review the tax code and its changes and inform us of ways we can lower our tax obligation. In fact, in law school I learned that there is a court case whose specific holding was an explicit right for Americans to do all they can (within the limits of tax and other laws) to reduce our tax payments. We have the right to do this, which you may not know, but strategies to reduce taxes are much more well-known because we all pay taxes (and want to reduce them!). The Medi-Cal benefit and application are as complex as a tax return. But in contrast to tax strategies, Medi-Cal is not only not well-known, but the resources to help seniors remain lean and hard to find. But that doesn’t mean they’re untested or unethical or illegal. Just like with reducing taxes, we’re carefully examining and evaluating all of the rules and regulations, abiding by them, and taking advantage of the options and opportunities available to us within the confines of these rules and regulations. We do nothing that’s remotely illegal and have very high ethical standards that we maintain.Give us a call and we can tell you more.

Can a nursing home in California kick out a senior resident for being unable to pay the bill?

No – even if the nursing home is trying to convince you that they can. They cannot. But you should act quickly to take advantage of the options you have to pay for care. Give us a call at 925.307.6543 or click here to make an appointment directly using our online scheduling. We have offices all over the Bay Area for your convenience, with our main office in Dublin and satellite offices in Oakland, Walnut Creek, San Francisco, San Mateo, Palo Alto, Sunnyvale, San Rafael and Antioch.