If you are going to qualify for Medicare when you reach the age of 65, and you will have resources when you retire, you may never consider the relevance of Medi-Cal. After all, this is a government health insurance program for financially needy individuals and families.
This line of thinking is understandable, but Medi-Cal may in fact be quite important, because this program will pay for long-term care. Since Medicare is a health insurance program that is designed to address the health care needs of seniors, you may assume that it would pay for a stay in a nursing home, but this is not the case.
Given the state of the costs, it is not easy to get out a checkbook and pay for a stay in a nursing home out of pocket.
Genworth Financial is a company that sells financial products for senior citizens, so they keep a finger on the pulse of the current state of health care costs around the country. According to their research, the median annual charge for a private room in a San Jose area nursing home in 2019 was just under $163,000.
That’s a lot of money, and if you need long-term care in 10 or 20 years, the figure may be considerably higher. The charge for a private room rose by 14.8 percent in 2019, and there was a 22 percent increase in the median charge for a semi-private room in our area.
When you are considering the potential impact, you should be aware of the fact that the average length of stay is one year. Plus, if you are married, you and your family must brace yourselves for two potential rounds of long-term care costs.
Now that you know why Medi-Cal may be part of your plan for aging, we can share some important pieces of information. Since Medi-Cal is a need-based program, there is a $2,000 limit on assets, but everything that you own is not considered to be countable for Medi-Cal purposes.
Your home is not a countable asset, and there is no equity limit. Californians get a break here, because there are equity limits in other states.
One vehicle that is used as a primary form of transportation would not be counted. Wedding rings, engagement rings, and heirloom jewelry are exempt, along with personal effects and household items.
You can have unlimited term life insurance and $1,500 worth of whole life insurance. Up to $1,500 can be set aside for final expenses, and prepaid burial plots are not counted.
When it comes to the shared assets that are counted, if a healthy spouse can still live independently, they would be entitled to a Community Spouse Resource Allowance. This is equal to half of the shared countable assets, but there is a limit. In 2019, it was $126,420, but it has been increased to $128,640 this year.
Another benefit allows the healthy spouse to continue to receive income that is earmarked for the institutionalized spouse if it is needed. Under other circumstances, the income would go toward the cost of care that is being received by the person that is residing in a nursing home. This is called the Monthly Maintenance Needs Allowance, and the maximum in 2020 is $3,216.
Attend a Free Workshop
We are holding a number of seminars over the coming weeks, and you can learn a lot if you attend one of these sessions. There is no charge at all, but we do ask that you register in advance so that we can reserve your seat. Visit our seminar schedule page to get all the details.
Schedule a Consultation Today!
We are here to help if you would like to discuss Medi-Cal planning or any other elder care matter with a knowledgeable attorney. You can send us a message to request a consultation appointment, and we can be reached by phone at 408-356-9200 or (831) 476-2400.