In California, 65 percent of nursing home residents rely on Medi-Cal to cover their nursing home expenses. Unfortunately, in some cases, the program can require you to pay all of your income toward care costs, and Medi-Cal has the right to take some of your assets to cover your costs after your death.
To reduce the financial burden, understand the basics of the program and do as much pre-planning as possible.
1. Asset Amounts Are Limited
If you use the Medi-Cal program to pay for nursing home expenses, you are only allowed to have a certain amount of assets. Unfortunately, this threshold has not changed for decades. As of 2017, the asset limit is $2,000 for an individual or $3,000 for a couple.
If you have assets that exceed that amount, they basically need to be liquidated before you can join the program. Unfortunately, you have to be careful about transferring or giving away assets. Before distributing payments to your nursing home, the program looks at the last 60 months of your personal finances to see what you have given away.
2. Some Assets Are Exempt
Luckily, certain assets are exempt. That means you can own them even if they exceed the above threshold. Exempt assets include your primary residence if your spouse lives there or you plan to return there. Possible exempt assets also include one vehicle, some personal belongings, a burial plot and certain life insurance policies.
If you are trying to get below the above asset threshold, you may want to buy some assets on the exempt list.
3. Income May Be Required
If you have an income, you may be required to do cost sharing. That simply means that you contribute some of your income to the cost of your care. Generally, you are only allowed to keep a small amount of money for monthly personal expenses.
4. Well Spouses May Be Allowed to Keep Some of Your Income
If you are married, your spouse may be allowed to keep some of your income. Under the laws related to Medi-Cal, the well spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA). As of 2017, the allowance is $3,023 per month. If the well spouse's income is less than that amount, he or she can keep part of your income.
For example, a well spouse has a pension of $1,000 and a Social Security payment of $1,100. The spouse going into the nursing home has a
monthly pension of $2,000 and a Social Security Income of $1,200. In this case, the well spouse's income is only $2,100. That is $923 under the MMMNA. The well spouse is entitled to keep that much of the other spouse's income while the rest goes to the Medi-Cal program.
If the situation were turned around, the well spouse would have an income of $3,200 and the spouse on Medi-Cal would have an income of $2,100. In this case, all of the latter spouse's income goes toward Medi-Cal because the well spouse's income meets the MMMNA on its own. The well spouse gets to keep all of his or her income.
Although there is a minimum allowance, there is no income limit imposed on the well spouse.
5. Medi-Cal May Take Your Home After Your Death
When someone who is on Medi-Cal dies, their home passes to their spouse. However, if they do not have a spouse or when the last spouse dies, the program may take the home to cover expenses. Luckily, you can avoid this by transferring ownership of the house.
Medi-Cal rules are complicated, and if you want to pass as many assets to your heirs as possible, you may need to do some pre-planning. To get started, contact the Rosā Law Offices today.