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.
2. Isn’t Med-Cal a kind of health insurance for low income families?
Yes. Medi-Cal is the name for both California’s free or low cost health insurance coverage for residents who meet certain eligibility requirements AND California’s version of the federal Medicaid program, which provides skilled nursing home care once Medicare benefits have been exhausted.
Medi-Cal covers the cost of skilled nursing home care and is available to anyone in medical need of such care who meets certain eligibility requirements of income and assets. The eligibility requirements are complex and almost universally misunderstood.
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.
4. How much does a skilled nursing home cost in California?
The cost of skilled nursing home care in California averages a little more than $7,000 monthly for standard care, but in the Bay Area, the average cost is higher, reaching $10,000-15,000 monthly and can even go up to $25,000 monthly. In addition, many nursing home residents require additional medical care – in fact almost all of them do as “standard care” doesn’t cover much of what’s needed – so the average cost is closer to $15,000 monthly. A Medi-Cal recipient usually only pays a small fraction of the expenses of a skilled nursing home facility.
You do not need to be sick or in imminent need of a nursing home to start planning for Medi-Cal. In fact, there are certain aspects of planning that should be done by every adult, such as creating good powers of attorney for health care and financial affairs. It’s never too early or late to do planning for Medi-Cal and there are a lot of options available if there’s time to plan before a crisis. We’ll do all we can to help you at whatever stage you’re in.
6. I’m already receiving Medi-Cal. Is it too late to do any planning or have I already lost?
No! It’s not too late the plan! 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.
7. I’ve heard I can only have $2,000 to apply for Medi-Cal. I don’t have a lot, but I have more than that. How will I ever qualify to apply?
So much of the information about Medi-Cal is incorrect, incomplete, or misunderstood. Part of this is because California’s rules for the federal Medicaid program are vastly different from the rest of the country. Part of it is because the Medi-Cal workers themselves often confuse the rules with other benefit programs. Because of this, many people think they can only have $2,000 to qualify for Medi-Cal benefits. This isn’t true in the sense you may be thinking, because while an unmarried applicant may only have up to $2,000 of “countable” assets to their name, many assets are considered exempt (or non-countable) or unavailable, so do not apply to this limitation. A primary home, for example, is exempt. In addition, a married applicant can keep countable assets in the amount of $119,220 (in 2016). An IRA is often unavailable under certain conditions, so does not affect eligibility. In some cases it’s possible to increase the amount permitted to have, through court order. The rules are lengthy and complex, so it is important to work with someone who knows them and who can walk you through each aspect of your specific situation. But thinking you can only have $2,000 to qualify for Medi-Cal is both inaccurate and incomplete.
8. Will I lose my house if I go on Medi-Cal or my spouse goes on Medi-Cal?
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.
9. How can I find out if I qualify for Medi-Cal?
We’ll do a free analysis for you if you’re already private paying for nursing home care. Click here to access our Medi-Cal Eligibility form and return it to us for an evaluation within 48 hours. If you aren’t already in a nursing home but think it’s going to happen soon, you can come in for a consultation. We offer no cost consultations and in most cases can do an evaluation of your situation and whether you can qualify right in the consultation. 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.
10. What is the “look back” period? How long will Medi-Cal look at my finances & assets?
California’s look back period is 30 months. Most of the country is 60 months, or 5 years, but California’s look back period is just 30 months. This is the time period that California will require disclosure of any transfers of property (gifts for example) that are for less than fair market value (for example giving $50,000 to your daughter) and may lead to a “penalty period” where you are not eligible to apply for Medi-Cal. Once you have applied for and are receiving Medi-Cal, you will need to recertify for benefits on an annual basis.
11. How do I apply for Medi-Cal? Can I do it myself?
You can apply for Medi-Cal through your county offices of health and human services. You can apply on your own, and many people do, but we do not recommend doing so. The Medi-Cal application is both time-consuming and paper-intensive, and can be likened to an IRS audit. The application process can be both confusing and frustrating to navigate, too, and many applications are denied simply because the applicant doesn’t understand the process, the questions being asked, or what needs to be provided. Further, even if the application is not denied outright, it can take many more months to complete because of information requests and exchanges going back and forth between the applicant and the Medi-Cal worker. By submitting the application properly the first time, we can avoid these delays.
12. Where can I get help with the Medi-Cal application?
Many individuals think that the Medi-Cal workers will help you with your application and that, in fact, it’s their job. This is not true, and as we’ve said, the complexity of the Medi-Cal rules mean that even the workers sometimes get confused about the rules. In addition, expecting the Medi-Cal workers to help you obtain the Medi-Cal benefit is like expecting your IRS auditor to tell you how to save money on your taxes. That’s neither their job nor what they’re going to do for you. But hope is not lost! We can help with the application. Give us a call at 925.307.6543 or click here to make an appointment directly using our online scheduling.
13. Why is information about Medi-Cal so hard to find and so confusing?
Here we go back to the fact that California Medi-Cal is different than the rest of the country’s Medicaid programs, and that the rules are so complex that even the Medi-Cal eligibility workers sometimes get it wrong. Add to this the fact that even Medi-Cal planning strategies have changed a great deal over the years. The strategies in the 1980s differed from the 1990s and 2000s, and then in 2009 everything changed again with the economic crisis. The rules are so complex that even qualified lawyers who know what they’re doing are hard to find. Learning and practicing Medi-Cal benefits planning is a difficult and time-consuming practice of law that not many are willing to accept.
14. How can you help? What’s your role in all of this?
Our role is twofold, but in all circumstances, we work with you as a team. When we first get together, we establish our main common goal, which is to find the best way to qualify and receive the Medi-Cal benefit, while at the same time keeping funds and assets as available as possible for future needs of the applicant and their ‘well’ spouse as well as their legacy (the spouse of the applicant may not be physically 100% healthy, but because they are not the nursing home resident, we call them the ‘well’ spouse). We want to be sure we’re working at a singular goal together, and in fact this is why we will not accept all clients who reach out to the office. We will only work with families who are all on the same page about providing what’s needed for the applicant and their spouse. But in the Medi-Cal process, our involvement has two prongs:
First, we’ll work with you to determine how we can structure your financial life to qualify for Medi-Cal and keep as much in assets available for future needs as possible. We do this by looking at your specific situation and creating a plan. We then implement the plan with legal documents and financial restructuring (where necessary). Then, second, we help by completing the Medi-Cal application for you. As an optional third prong of our assistance, we also offer ongoing legal services for those who want it, in the form of open availability for questions and concerns, and preparing annual recertification and accounting requirements (most of our clients find this to be a great additional service that takes the stress and pressure off of them after the application has been approved).
15. Why do you do this? What’s your story?
Like most advocates, advisors and attorneys who work with seniors and help with Medi-Cal and other governmental benefit planning and applications, I have my own personal reasons to do this work. Click here to see “Our Story” for, well, the full story.
16. How long does all of this take?
The process can be a long one, so we tell clients to expect a 6 to 9-month process. With a little luck, this sometimes is shorter, and we do all we can to make it as quick and painless as we can.
17. Is my existing estate plan sufficient for Medi-Cal planning?
Not likely, as Medi-Cal planning often involves – requires, really – sophisticated and complex estate planning documents far more advanced than a simple living trust or will.
18. Can’t I just use my current/former estate planning attorney to help me with this?
Unfortunately, probably not. Medi-Cal benefit planning is a highly specific area of law that very few attorneys practice. In fact, much like you, most estate planning attorneys don’t know anything about Medi-Cal benefits or the ways in which attorneys can help seniors qualify for and obtain Medi-Cal. They may even tell you that it’s not possible. Our recommendation is to work only with elder law/estate planning attorneys who routinely do Medi-Cal planning – like us.
To use an analogy, the relationship between general estate planning attorneys and elder law estate planning attorneys is a little like the relationship between bookkeepers and CPAs. A general estate planning attorney is much like a bookkeeper. They know a great deal about finances and accounting, and can probably help you prepare your taxes quite effectively. You may prefer to work with them because they’re friendly and nice and you’ve been working with them for a long time, over many changes in your financial and family life. A CPA is often unnecessary unless you have one you’ve been working with or if you have a more complex tax situation you want to be sure to report properly, like a business or partnership. Medi-Cal benefit planning is like creating a tax return for a business with a large amount of income and expenses, equipment, inventory, and employees that requires sophisticated tax planning and reporting. While you may want your bookkeeper to help you with it, the reality is that you need to consult with a qualified, professional CPA to be sure it’s done correctly. It’s just too important not to, and there’s too much to lose if it’s not done properly. The same goes for estate planning versus Medi-Cal and other governmental benefit planning. While no analogy is perfect – including this one – we do want to try to illustrate the difference between the estate planning attorney you may know and the needs that you have that may be too important to leave to anyone other than an experienced professional.
19. Is this all 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. 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 “Our Story.”
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.
20. How much does all of this cost?
The planning and Medi-Cal application do have associated fees. But these fees are less of a cost and more of an investment, because the applicant is receiving such a large benefit from Medi-Cal to pay for nursing home care, which can be $10-15,000 monthly. For the price of a month to a month and a half of nursing home care, the applicant could receive a return on that investment of well more than $100,000/year!
21. How do I know I can trust you?
That’s really for you to decide based on what you’ve read and seen. All we can do is give you information about what’s possible and who we are, and then you can determine what you want to do. We do understand that there are a lot of scams out there, and many of them target vulnerable seniors. Seniors and their loved ones must be careful – vigilant even – in selecting helpers and professionals. We take measures to show our commitment to helping veterans age with dignity and the respect they’ve earned and deserve. Christina ensures that she is up to date with all laws and regulations as she is:
- A member of the California State Bar Association (2000) and the California Bar’s Trust & Estates Section;
- A graduate of UCSB with a BA in Law & Society; a graduate of UC Hastings College of the Law with a JD, a graduate of Michigan State University Broad College of Business with an MBA, and a graduate of the University of the Rockies with a MA in Psychology.
- A member of the Alameda County Bar Association (ACBA) and the ACBA Trusts and Estates Section;
- A member of the Contra Costa County Bar Association (CCCBA) and the CCCBA Elder Law as well as their Estate Planning & Probate Sections, along with their Women’s and Solo & Small Firm Sections;
- A VA-accredited attorney (since 2012);
- A member of California Advocates for Nursing Home Reform (CANHR);
- A member of the National Academy of Elder Law Attorneys, Inc. (NAELA);
- A member of the Coalition for Compassionate Care of California;
- A member of the National Care Planning Council;
- A member of Points of Life, LLC; and
- A member of Elder Counsel.
22. This is all so overwhelming – where do I start?
It IS overwhelming, and we understand. We consider it our job to help to make it easier and more manageable. It’s overwhelming enough dealing with the increased or changed needs of our loved ones, and adding the responsibility of finding qualified care and paying for it just adds to the pressure. It’s a labor of love, but that doesn’t make it less of a labor! 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.