Medicare is a program that you pay into when you are working throughout your life. Payroll or self-employment taxes are used to fund the program. You qualify for Medicare coverage once you reach the age of 65 , and you go forward with health insurance during the latter portion of your life.
Medicaid is a government program that provides health care for people that don’t have health insurance and don’t have enough money to pay for health care. There’s no particular age at which you become eligible for Medicaid.
If you are a senior citizen and you paid into the program sufficiently, you would be receiving Medicare coverage, not Medicaid. However, Medicaid is important to the elder care community because the majority of senior citizens that are receiving long-term care are enrolled in the program.
A high percentage of them were never really financially needy during their lives, but the high costs force them to seek Medicaid coverage because Medicare won’t pay for long-term care.
Medicaid is a jointly run program that is administered by the federal government and each state government. In the state of California, the program is called Medi-Cal.
As we mentioned above, the program is intended to help people who have financial need. As a result, there are relatively stringent rules regarding the amount of assets that you can have in your possession as a Medi-Cal applicant.
In a general sense, the upper asset limit is $2,000. However, you can maintain possession of your home without its value counting against your $2,000 limit. One vehicle is also exempt, and household goods, personal effects, and some jewelry won’t count against you.
What can you do with assets that do count that exceed $2,000 in value? Can you simply give these assets away?
No one can stop you from giving your assets away while you’re still living. However, there is something called a look back period. In general, the Medicaid program evaluators will examine your financial transactions over the five years that preceded your application for the program. If you have made significant transfers that appeared to be an effort to spend down to qualify for the program, you can be penalized.
Across most of the country the look back period is five years. However, the Medi-Cal look back period is just 30 months.
If you’re interested in Medi-Cal eligibility, the wise course of action would be to discuss everything with a licensed Campbell CA elder care attorney. Your lawyer will gain an understanding of your unique situation and explain the program to you in detail. If you want to go forward, you can do so with a well constructed plan that leads to Medi-Cal eligibility while allowing a maximum store of assets to remain within your family.
Our office regularly offers free Medi-Cal Planning Workshops. To view a list of upcoming workshops, click on this link: Free Workshops