Compliments of The Litherland Law Firm
Written By: The American Academy of Estate Planning Attorneys
If your spouse is suffering from Alzheimer’s disease, you understand how devastating the disease can be – both to the patient and to the caregiver. Alzheimer’s doesn’t just rob the patient of memories, it also robs loved ones of their time and energy. In most cases, the symptoms of Alzheimer’s progress slowly, making it relatively easy to care for a loved one during the early stages of the disease. As the disease progresses, however, it becomes more and more difficult. This is particularly true due to the effects of the natural aging process. Your spouse may not be at the point where a nursing home is necessary; however, you may need help caring for your spouse. There may be an adult day services program in your area, but you might be worried about the cost. The good news is Medi-Cal’s “home-based” services may be able to help. Furthermore, if you plan wisely, your loved one could be qualified for Medi-Cal when the time comes for long-term care.
The Cost of Care
Like many retirees, you and your spouse likely managed to accumulate a modest nest egg that includes cash and securities to help you live comfortably during your “Golden Years.” That nest egg, however, could disappear much faster than expected as a result of the costs associated with an adult day services program. Furthermore, if there is no “snapshot” date in place at the moment, the money you spend on a day services program is not counted toward any potential Medi-Cal “spend-down” requirements. To understand why that is important, you need to know a little more about Medi-Cal eligibility.
Medi-Cal Eligibility and the “Countable Resources” Limit
Because neither your basic health insurance policy nor Medicare will cover long-term care (LTC) costs for your spouse down the road, you will likely turn to Medi-Cal for help with those expenses. To qualify for Medi-Cal, both your income and the value of your “countable resources” (assets) must not exceed the program limits. Some assets, such as your home, are exempt from inclusion. However, your nest egg is undoubtedly not exempt. Assuming your nest egg is worth in excess of the limit when you apply for Medi-Cal, a waiting period will be imposed during which time you will be expected to “spend-down” your excess assets. Basically, you will be expected to cash in, and rely on, your non-exempt assets to cover your LTC expenses until the value of those assets drops below the program limit.
The problem you face is the money you spend on the day services program will not count toward the Medi-Cal spend-down requirement because no “snapshot” date has been established at this point. The “snapshot” date is the date on the first day of the month in which a Medi-Cal applicant reached 30 days of “continuous institutionalization”.
The Potential Solution – Medi-Cal Home and Community Services
The good news is the Medi-Cal Home and Community Based Services (HCBS) program might be able to help. Each individual state determines what type of benefits, if any, will be offered through the HCBS waiver program. The purpose of a HCBS waiver program is to offer an alternative to long-term care by providing similar services in a home setting. Nationwide, there are over 300 HCBS waiver programs in operation that serve over one million people each year. These programs allow participants to remain at home instead of being institutionalized while still providing the type of care offered in a LTC facility. To participate in an HCBS waiver program an applicant must be eligible for Medi-Cal. The eligibility requirements related to income and resources are treated differently than they typically are if both of you are still at home.
How Can an HCBS Program Help You and Your Spouse?
The obvious benefit to applying for an HCBS program is that you are able to receive much needed assistance without having to put your spouse in a LTC facility. The other benefit is your application will be treated as if you are applying for institutionalized care. If approved, the “snapshot date” will be triggered based on participation in the HCBS program. Moreover, if you are approved for benefits now, the money you spend on expenses related to the adult day services will go toward your Medi-Cal “spend-down” requirement. Furthermore, the spousal impoverishment rules that apply when one spouse goes into nursing home care will apply, meaning there will be a division of assets for purposes of determining eligibility. As such, your nest egg will be split between you and your spouse and your spouse will only need to spend-down half of that. Later on, if your spouse does end up needing nursing home care, he/she will probably already be qualified for Medi-Cal so you won’t have to worry about the cost of that care.
To sum everything up, applying for HCBS benefits requires you to apply for Medi-Cal as if your spouse is institutionalized. That, in turn, creates a snapshot date and allows you to count the money you spend on your spouse’s adult day services toward your Medi-Cal spend-down requirement, likely resulting in your spouse already being approved for benefits should the need for nursing home care arise down the road.
Be sure to discuss the Home and Community Based Services in your state with your Medi-Cal attorney to learn about all your planning options.