Medi-Cal is a jointly run federal/state government program that provides health insurance for people who have very limited financial capabilities. In the state of California, the program is called Medi-Cal.
Though it is a need-based program, Medi-Cal is very important for a significant percentage of senior citizens who were never financially needy throughout their lives. This is because Medi-Cal pays for long-term care. Medicare will not assist with long-term care expenses.
Medi-Cal Planning
To qualify for Medi-Cal, you would typically engage in something called a spend down. The term is largely self-explanatory: you give away or spend down your countable assets in advance of applying for the program.
The term countable is quite operative here. Everything that you own is not countable. Under federal guidelines, a life insurance policy valued at up to $1,500 and $1,500 set aside for burial or cremation expenses would not count.
One vehicle would be allowed, and your wedding ring, your engagement ring, and any heirloom jewelry that you have in your possession would not be countable. Your personal effects are not countable under Medi-Cal guidelines.
In addition to the above, your home is not looked upon as a countable asset.
Medi-Cal Monthly Maintenance Needs Allowance
Now that we have provided the necessary background information, we can look at the Medi-Cal monthly maintenance needs allowance.
There are rules in place for the benefit of the healthy spouse. If you are healthy and capable of taking care of your own day-to-day needs while your spouse is applying for Medi-Cal, you can retain a certain store of assets.
The institutionalized spouse may have sources of income, such as a pension and/or Social Security. Medi-Cal would typically require the institutionalized spouse to contribute a significant portion of this income toward the cost of long-term care.
However, this percentage would not go toward the cost of care if the healthy spouse was relying on all or some of the income for support. The healthy or community spouse is entitled to a monthly maintenance needs allowance.
The maximum monthly maintenance needs allowance in the state of California in 2014 is $2,931. This is the maximum that could be drawn from income earned by the institutionalized spouse.
Medi-Cal Planning Consultation
Long-term care is extremely expensive, with the average annual cost for a private room in a nursing home exceeding $100,000 in the State of California. Most people will require long-term care eventually, so this is a matter that is relevant to everyone.
You probably do not want to give your life savings to a nursing home before you can qualify for Medi-Cal. If you take the right steps, you can potentially gain eligibility while keeping a maximum store of assets in the family.
Contact our firm if you would like to discuss Medi-Cal planning with a licensed elder care attorney. You can request an appointment through our contact page.
We also invite you to register for and attend one of our free Medi-Cal Planning Workshops. For more information, follow this link: Free Seminars and Workshops
