When you are evaluating your potential retirement expenses, you should take the matter of long-term care very seriously. It is more likely than not that you will eventually need help with your activities of daily living. Long-term care is very expensive, and Medicare will not pay for it.
Medi-Cal is a government health insurance program that will pay for long-term care if you can qualify. It is California’s version of the national Medi-Cal program. Because of the exorbitant costs associated with long-term care, most of the seniors in nursing homes are enrolled in the Medi-Cal program.
Because Medi-Cal is a need-based program, you must be able to demonstrate financial need to qualify. There are rather complex rules that govern Medi-Cal eligibility. Many people who retired with significant resources do ultimately qualify for Medi-Cal, because they plan ahead effectively.
This is a matter that you can discuss with our firm if you are interested in learning about Medi-Cal planning. You can contact us through this website to schedule a free consultation. We also regularly offer free Medi-Cal Workshops. You can register for an upcoming workshop by clicking on this link.
Now let’s move on to some of the details regarding what you can keep if your spouse is applying for Medi-Cal.
The Community Spouse
The spouse that will not be entering a long-term care facility is called the healthy or community spouse. Under Medi-Cal regulations, the home that was owned by the couple is not counted toward Medi-Cal upper asset limits if the healthy spouse is remaining in the home. So, you will not be displaced from your home if your spouse applies for Medi-Cal to pay for long-term care.
Medi-Cal is a program that is jointly administered by the federal government along with each respective state. Therefore, there are federal guidelines, but each state has a certain amount of latitude.
The above having been stated, according to federal guidelines the healthy or community spouse may keep half of the shared assets that are considered to be countable by the program up to a certain limit.
This limit is typically changed slightly on an annual basis to account for inflation. In 2014, the maximum that can be retained by the community spouse is $117,240. The minimum that a state could allow the healthy spouse to retain is $23,448.
The healthy or community spouse is also entitled to a monthly maintenance needs allowance. In other words, if you were relying on your spouse’s income, you could continue to receive some or all of that income under Medi-Cal rules.
There is a maximum monthly needs allowance, and it stands at $2,931 this year. The minimum monthly needs allowance that a state can allow is just under $1,940 in 2014. (This is the figure for the 48 contiguous states. The minimum monthly maintenance needs allowances are higher in Hawaii and Alaska.)
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