Medi-Cal Eligibility and Long-Term Custodial Care

Medicare coverage in an SNF is limited to "skilled" (versus "custodial") nursing or rehab services. Most of us don't get the full 100 days of coverage because when we "plateau" or cease improving, care becomes custodial, not rehab.

A recent court settlement has eliminated the necessity to show continued improvement in order to get continued rehab services. Under a case called Jimmo v. Sebelius, it is only necessary to show that continued rehab services are necessary to maintain the current condition or prevent deterioration.

If you are in an SNF getting Medicare rehab services, and someone tells you that your Medicare rehab will end before the 100 day period is up, do this:

1. Google "Jimmo v. Sebelius Summary," access the Settlement Agreement Fact Sheet, and make a copy of it.

2. Take the copy of the fact sheet to the SNF administrator who told you your Medicare rehab services were about to end.

3. Give them the fact sheet and cite the following quoted language from the Fact Sheet -- "When skilled services are required in order to provide care that is reasonable and necessary to prevent or slow further deterioration, coverage cannot be denied based on the absence of potential for improvement or restoration."

If you still need "skilled nursing care" to maintain your condition or to prevent your condition from deteriorating, you should get the full 100 days.

According to The Scan Foundation, there were over 102,000 Californians in skilled nursing in 2010. Their numbers will increase as the demographic tidal wave called "baby boomers" age.

The 2024 Average Pay Rate for Medi-Cal patients in skilled nursing is $12,608 or more than $150,000 per year! Private pay by individuals not covered by Medi-Cal can be even higher.

Though most SNFs in California are Medi-Cal certified, some are not. If you run out of money in a Medi-Cal certified facility you cannot be evicted for converting to Medi-Cal. Such is not the case in non Medi-Cal certified facilities.

Remember though, converting to Medi-Cal will mean you lose your private room, unless you and your family can pay the difference between the Medi-Cal rate (for a shared room) and the private room rate.

Due to the high costs of custodial care in a Skilled Nursing Facility (SNF), Medi-Cal has become a primary source of funding for many of California's long-term care patients.

Medi-Cal ("Medicaid" everywhere else!) is a "needs based" (or "means tested") federal-state partnership providing healthcare for folks unable to afford medical care. Traditional Medi-Cal planning focuses on three areas: (1) eligibility issues; (2) share of cost issues; and (3) estate recovery issues. Consequently, the goal of planning for long-term Medi-Cal for custodial care in an SNF emphasizes becoming eligible, paying as little as possible and avoiding an estate recovery by the state, before the Medi-Cal beneficiary dies.

A recent implementation of "California Care" has shifted many low-income people into "expanded Medi-Cal". Interestingly, expanded Medi-Cal is not "means tested", meaning that your assets and money aren't relevant, your income is the primary determining factor.

For disabled and sick people under age 65, California Care will also pay for custodial care in an SNF without the asset rules of traditional Medi-Cal. However, your estate can still be subject to a potential recovery claim when you die. You can review eligibility for expanded Medi-Cal if you google "California Care Eligibility Rules" and click on "California/Medicaid.gov".

Effective January 1, 2024, Medi-Cal no longer asks about assets for any Medi-Cal program. Going forward, Medi-Cal will only ask questions regarding income. Since Medi-Cal will now focus on your income, much of traditional Medi-Cal planning is now essentially obsolete.

• Gifting of Assets: If Medi-Cal no longer cares what you own, then there is no need to gift or transfer assets in order to qualify for Medi-Cal.
• Annuity Purchases: The need to "shelter" assets in some form of annuity is unnecessary.
• Spousal Transmutations: We no longer need to transfer assets from the "institutionalized" spouse to the at-home "well" spouse, in order to secure eligibility (transfers for income allocation remain viable).

Going forward, I do see an increased need for revocable living trusts, which will avoid probate and thus completely eliminate Medi-Cal recovery claims. 

Also, court-ordered income allocations, "orders of support," will be increasingly necessary to avoid spousal impoverishment.

The best presentation of the new laws is set forth by my friends at the California Advocates for Nursing Home Reform 9CANHR) (updated by CANHR as of April 12, 2024):

2024 Medi-Cal Asset Elimination Frequently Asked Questions 

Posted on Friday, April 12th, 2024

When did the asset limit change happen?

California Assembly Bill 133 was signed into law in 2021, which began a process to remove the asset limit for Non-Modified Adjusted Gross Income (Non-MAGI) Medi-Cal programs, including the Long-Term Care, Aged Blind Disabled, Medically Needy and Working Disabled Programs. The state temporarily increased the asset limit in July of 2022, and on January 1, 2024, California completely eliminated asset limit requirements altogether. This means that as of 2024, Medi-Cal only asks about income and no longer asks about assets for any Medi-Cal program.

What were the previous asset limits?

Historically, seniors and people with disabilities who applied for Medi-Cal had to keep their assets below $2,000 for a single person and $3,000 for couples. In 2022, the asset limits were temporarily increased to $130,000 for an individual and $195,000 for a couple. Beginning January 1, 2024, California no longer considers assets as part of the eligibility determination for all Medi-Cal programs.

What is the difference between assets and income?

Assets are things that you own, such as bank accounts, stocks, retirement accounts, cash, vehicles, and property. Income is money received, typically on a regular basis, from sources such as work, retirement accounts, Social Security, state disability insurance, IRA distributions, stock dividends, rent, or interest and dividends from investments. Medi-Cal applies different eligibility criteria based on the source of your income. Some types of income may not be counted for specific programs; for example, income from VA Aid and Attendance is not counted for Medi-Cal eligibility purposes.

Is there an income limit for Medi-Cal programs?

Each Medi-Cal program has specific income limits, and income rules and limits remain the same. The Medi-Cal program for people ages 65 and older or who are disabled has an income limit of $1,732 (as of April 2024). For applicants with income over that amount, they may still be eligible with a shared monthly cost (formerly known as a share of cost). Medi-Cal requires applicants and beneficiaries to report income from all sources, including income received from assets such as retirement or investment income, stocks, annuities, and rental income. To learn more about the income limits for common Medi-Cal programs for older adults or people with disabilities, read CANHR’s fact sheet on Community-Based Medi-Cal Programs and Overview of Long-Term Care Medi-Cal.

If my assets generate income, how will that affect my shared monthly cost?

Medi-Cal requires applicants and beneficiaries to report income from all sources. Income received from some assets may be counted toward shared monthly costs, while others may be excluded from the calculation. Examples of income from some assets that would be included in the share of cost calculation include:

• Rental property income
• Periodic payments and required minimum distributions from IRAs, retirement plans for self-employed individuals, and work-related
• pension funds
• Payments distributed from an annuity
• Interest and dividends received from investments, savings accounts, etc.
• Read ACWDL 23-21 for a full list of countable and excluded income sources.

Does asset elimination also apply to Supplemental Security Income (SSI)?

The asset limit changes only apply to California’s Medi-Cal program. Individuals who receive SSI benefits, or other public benefit support programs will still need to meet asset limit rules for those programs.

Will Medi-Cal still ask to be repaid for services I receive?

Medi-Cal recovery rules have not changed. If a beneficiary used certain services, it is possible that the state may make a claim against their estate when they die if the estate is subject to probate under California law. There are simple steps people can take to protect their home, or other assets, from Medi-Cal Recovery. Read CANHR’s Medi-Cal Recovery Guide for additional information.

How will married couples and registered domestic partners be impacted by asset elimination?

Beginning January 1, 2024, counties will no longer use information about the assets of applicants or their spouses or registered domestic partners (RDP), in determining eligibility. Counties will also no longer determine the Community Spouse Resource Allowance (CSRA) if the applicant’s initial month of eligibility is on or after January 1, 2024. This means that the “community spouse” (or RDP) can have unlimited assets in their name. It is important to remember that under spousal impoverishment rules, the income of the spouse or RDP who is on Medi-Cal will be used to determine eligibility and share of cost, and any income generated by assets in the name of that person must be reported to Medi-Cal. Income received in the name of the “community spouse” alone would not be counted toward the SOC of the spouse who requires nursing home or home and community-based services.

Example: Jose has Parkinson’s disease and wants to apply for Medi-Cal in January of 2024 to pay for in-home care through a Home and Community-Based Services program. Jose and his wife Theresa have $50,000 in joint savings, and Theresa has an investment account of $200,000 on which she earns $5,000 a year. Jose could be eligible for Medi-Cal, as there is no longer an asset limit, and under spousal impoverishment rules, the income received in Theresa’s name alone is not counted towards Jose’s monthly share of cost.

Is there a benefit to transferring income generating property between spouses?

No transfer of assets after January 1, 2024, will result in a period of ineligibility for nursing facility level of care. Spousal impoverishment under Medi-Cal has special income rules that offer flexibility in arranging income to the benefit of the couple. In some cases a property transfer between spouses resulting in a change of ownership of income could reduce or eliminate share of cost. To learn more about spousal impoverishment, read our fact sheet.

How is rental property treated?

Rental properties are an asset and are not considered in determining eligibility; however, the net income received is countable and will be used to determine the shared monthly cost (ACWDL 23-20). Eligibility workers may verify income through trust documents, rental agreements, and bank or financial statements.

How are trusts treated under the asset limit changes?

Properties titled in the name of the trust (i.e., trust principal) will not be counted for purposes of Medi-Cal eligibility and re-determination starting January 1, 2024. However, payments from the trust or trust income (interest from brokerage accounts, annuities, etc.) that are paid to the trust beneficiary are considered income for eligibility purposes, unless an exemption applies or the income is unavailable (ACWDL 23-22E). Payments made from the trust to third parties for the benefit of the beneficiary for housing, utilities, or food are counted as in-kind income if the payment is for the full amount. As long as the beneficiary pays even a portion of their cost for housing, utilities, or food, trust payments to supplement those costs will not be counted. Payments made to third parties for the purchase of items other than housing, utilities, or food are not counted as in-kind income or used in the Medi-Cal eligibility determination.

Example: Jane decides to use some of the money in her trust to pay for a kitchen remodel. Each time she pays for services, she writes a check directly from her trust account to the vendors. These payments will not be counted as income because they were made directly to vendors (third parties) and are not for housing, utilities, or food. (22 CCR §§ 50489.5(f)(3), 50513.)

Will the 30 month lookback period still apply after January 1, 2024?

The lookback period only applies to those applying for Medi-Cal coverage in a skilled nursing facility. A lookback period will no longer apply to transfers made on or after January 1, 2024. Transfers made prior to January 2024 may be subject to transfer penalties. Counties will review the 30 months prior to application for Long Term Care Medi-Cal services for any transfers of property but will not penalize those transfers made from 2024 forward.

Example: Josh enters a nursing home in October 2024. He transferred $150,000 in August of 2024 to his brother. The county will not consider the months of January through October of 2024 but will review the 21 months prior to January 1, 2024, for transfers of property made during that time. Because the transfer happened in 2024, there is no transfer penalty.

Transfers of exempt property (as per rules of the time of the transfer) would not result in ineligibility. For example, there would be no transfer penalty for someone who had $125,000 in total assets in 2023 and made a transfer of $100,000, which was under the $130,000 asset limit for that time period.

Please note that a transfer penalty would only be applied to those entering a nursing home on Medi-Cal and not to applicants or beneficiaries living in the community. Per current policy, all possible transfer penalties must be reviewed for undue hardship before imposing a period of ineligibility.

Example: In December of 2023, Maya cashed out her retirement account and transferred the entire $250,000 to her daughter after receiving incorrect advice on how to become eligible for Medi-Cal. In June of 2024, she applies for Long Term Care Medi-Cal after ending up in a nursing home. As the county will review the 25 months prior to 2024, the transfer could create a period of ineligibility, and Maya could possibly apply for undue hardship as outlined in ACWDL 90-01, section 50096.5.

If I sell my home, will the proceeds be treated as income or assets?

When the home is sold, the proceeds would be considered converted property and will continue to be treated as an asset. (22 CCR § 50407) It is important to remember that if the proceeds generate interest income, it is considered countable unearned income for the purposes of eligibility and shared monthly cost calculations.

If I withdraw a lump sum from an investment account, will it be counted as income?

Scheduled periodic distributions, whether monthly or annual, or payments of interest and dividends, are considered income in the month received. In the following month after receipt, those funds are considered assets. Distributions that are received once per year can be counted in the month received, or you can ask Medi-Cal to amortize (evenly break up) the amount over a 12-month period if it would help you to lower or avoid a share of cost. Lump sum withdrawals that are separate from a regularly scheduled periodic distribution are considered converted property and should be treated as an asset. (ACWDL 02-51)

How will an inheritance impact my Medi-Cal?

Receiving an inheritance will be counted as income in the month received and an asset the following month. For example, if you receive $100,000 from an inheritance in March, it will be counted as income in that month and may increase your shared monthly cost for the month of March. In April, the $100,000, or whatever is left of it, will be counted as an asset.

How will a lawsuit settlement impact my Medi-Cal?

Lawsuit settlement funds will be counted as income in the month received and considered an asset the following month. Additionally, the Department of Health Care Services (DHCS) can seek repayment for any services that Medi-Cal paid for on behalf of a beneficiary who is involved in a personal injury, class action, or medical malpractice lawsuit. Medi-Cal recipients are required by law to notify DHCS in writing within 30 days of filing a lawsuit. (W&I Code sec. 14124.70, 14124.73).

A. Medi-Cal vs. Medicare

Medicare Coverage of Skilled Nursing Care

Medicare does not pay for all medical expenses and usually must be supplemented with private insurance (“Medigap”), or consumers can enroll in an HMO plan that contracts with Medicare. After 3 days of prior hospitalization, Medicare will pay up to 100% for the first 20 days of skilled nursing care. For the 21-100 days, the patient will pay a co-payment. The premiums and copayments are increased every year. There will be no Medicare coverage for nursing home care beyond 100 days in any single benefit period.

It should be noted that Medicare only pays for “skilled nursing care,” does not pay for “custodial care,” and the average stay in a nursing home under Medicare is usually less than 24 days. Thus, few can look to Medicare to pay for any substantial nursing home costs.

For more information on Medicare coverage, contact your local Health Insurance Counseling and Advocacy Program (HICAP). 

Medi-Cal for Long Term Care

Medi-Cal is a need-based program designed to help low-income people pay for medical care. Unlike Medicare, Medi-Cal recipients must apply and meet certain eligibility criteria to receive coverage. This fact sheet focuses primarily on Medi-Cal for Long-Term Care, which helps cover services in a skilled nursing facility or nursing home. For information on community-based Medi-Cal, Medi-Cal coverage for someone at home or in the community, please read CANHR’s fact sheet on Aged & Disabled, Medically Needy, and Working Disabled Medi-Cal Programs. 

B. Medi-Cal Eligibility

As of January 1, 2024, Medi-Cal will no longer count assets to determine eligibility. This means that anyone, regardless of how much they own, may receive Medi-Cal benefits, including:

• Individuals in skilled nursing or intermediate care facilities or those who qualify for home and community based services
• People who are 65 or over, blind or disabled
• Low-income persons with dependent children
• Children under 21
• Pregnant women
• SSI and other categorically related recipients are also automatically eligible for Medi-Cal.

C. Monthly Resident Cost (formerly known as “Share of Cost”)

Skilled nursing facility residents must agree to pay the facility a portion of their income each month. This is called the monthly resident cost and is treated much like rent. The resident is responsible for paying their monthly resident cost to the facility, and Medi-Cal will then cover the remaining costs for the month. 

The monthly resident cost is calculated by taking the individual’s gross monthly income, deducting any out-of-pocket medical premiums, and deducting the Personal Needs Allowance of $35. This is the amount that a skilled nursing resident can keep for themselves while the remainder of their income is paid to the facility. If the resident is on SSI, the personal needs allowance is increased to $50. If the resident is receiving VA Aid and Attendance benefits, they are entitled to receive a total of $125 because they receive an additional $90 on top of the $35. 

All Medi-Cal beneficiaries who have a Medi-Cal share-of-cost of more than $500 will no longer have their Medicare Part B premium covered by Medi-Cal, it will automatically be deducted from the beneficiary’s Social Security check. This does not apply to Medi-Cal eligible nursing home residents, as their Part B premium will continue to be covered by Medi-Cal.

Example: Medi-Cal in a Nursing Home

Seth enters a skilled nursing facility. His income is $1,800/month, and pays $50 a month for a supplemental vision plan. 

$ 1,800 Gross unearned income

     -$50 Medical premium

     -$35 Personal Needs Allowance

$ 1,715 Seth’s monthly resident cost to be paid each month to the nursing home or for medical costs not covered by Medi-Cal.

* The remaining $35 is Seth’s Personal Needs Allowance.

Other Deductions from the Share of Cost:

In addition to the “any income deduction” and the monthly maintenance need level, any monthly medical premiums can also be deducted before the monthly resident cost is determined, such as your Medicare Part B premium or supplemental vision and dental insurance. Other deductions can also be made, depending on the circumstances.

For example, under a legal settlement, Hunt v. Kizer, recipients may use old, unpaid medical bills that they have to reduce the monthly Medi-Cal resident cost. Original documentation showing the billing statement is an outstanding balance should be provided to the county eligibility worker. The documentation should include the following information: 

• Name and address of the provider who provided the service
• Name of the person who received the medical service
• Brief description of the medical service received
• A “procedure code,” which is a medical reference number associated with the service provided.
• Provider’s Medi-Cal Provider Identification Number or Provider License Number
• Date(s) the medical service was provided
• Date on which the bill was issued. If the bill is an unpaid, old medical bill, the billing date must be within 90 days of the date the county receives the bill. If the bill is older than 90 days, the Medi-Cal recipient can ask the provider for a more recent bill. 
• The amount owed solely by the individual and not subject to third-party coverage.

The monthly resident cost will be adjusted to reflect the cost of the outstanding balance, which could, for example, mean no monthly resident cost until the old, unpaid bills are paid off. This is not automatic and should be discussed with the Medi-Cal county eligibility worker.

Under the Johnson v. Rank settlement, recipients may use their monthly resident cost to pay for medically necessary supplies, equipment, or services not covered under the Medi-Cal program. This deduction is only applicable to long-term care residents. A current physician’s prescription is necessary and must be put in the recipient’s record at the facility. This prescription must be a part of the physician’s plan of care. After a copy of the prescription and the bill is presented to the facility, the facility will deduct the cost from that month’s resident cost and bill the resident for the remaining monthly resident cost.

D. What Does Medi-Cal Cover?

Medi-Cal pays for health care services which meet the definition of “medically necessary.” Services include: some prescriptions (although the Medicare Part D program now covers most prescriptions), physician visits, adult day health services, some dental care, ambulance services, X-ray and laboratory costs, orthopedic devices, eyeglasses, hearing aids, etc. Some services, such as home health care, durable medical equipment, and some drugs, require prior authorization.

Nursing home care is covered if there is prior authorization from the physician/health care provider. Residents are admitted on a doctor’s order, and their stay must be “medically necessary.” 

If the individual qualifies for Medi-Cal, they do not need private “medigap” or HMO insurance to pay for costs, though if such insurance is carried, the premiums are deducted from income when computing the monthly resident cost and therefore costs the beneficiary nothing. If the HMO coverage includes drug benefits, maintaining the HMO coverage may become more important, as the beneficiary will continue to receive drug benefits from the HMO, which may be more comprehensive than the Medicare Part D coverage.

E. Assets

Although assets are no longer considered for eligibility purposes, applicants must remember that income generated from assets (e.g., rental income) may be included in the monthly resident cost calculation. Medi-Cal requires applicants and beneficiaries to report income from all sources. Income received from some assets may be counted toward the monthly resident cost, while others may be excluded from the calculation. Examples of income from some assets that would be included in the calculation include:

• Rental property income
• Periodic payments and required minimum distributions from IRAs, retirement plans for self-employed individuals, and work-related pension funds
• Payments distributed from an annuity
• Interest and dividends received from investments, savings accounts, etc.
• Please see ACWDL 23-21 for a full list of countable and excluded income sources.

Income from Real Property

If a Medi-Cal beneficiary receives rental income from real property, including the principal residence, the “net” income from the property is used in determining what will be counted toward the monthly resident cost. Certain expenses are deducted from the gross rental income to determine the net income. These include taxes and assessments, interest payments (not principal), insurance, utilities, and upkeep and repairs.

Upkeep and repairs are the greater of either the actual amount expended for upkeep and repairs during the month or 15% of the gross monthly rental, plus $4.17 per month. (22 CCR §50508). Note that other calculations are used for income from rental of rooms, rental of unit(s) in a multiple dwelling unit, or other dwellings on the property (22 CCR §50508).

F. Transfer/Gifting Assets

The lookback period only applies to those applying for Medi-Cal coverage in a skilled nursing facility. A lookback period will no longer apply to transfers made on or after January 1, 2024. Transfers made prior to January 2024 may be subject to transfer penalties. Counties will review the 30 months prior to application for Long Term Care Medi-Cal services for any transfers of property but will not penalize those transfers made from 2024 forward. 

A transfer of non-exempt assets can result in a period of ineligibility if the divided value of the transferred assets and the average private pay rate (APPR) is one or more months. The current APPR is $12,608 (effective January 1, 2024).

Example: Transfers made on or after January 1, 2024

Josh enters a nursing home in October 2024. He transferred $150,000 in August of 2024 to his brother. The county will not consider the months of January through October of 2024 but will review the 21 months prior to January 1, 2024, for transfers of property made during that time. Because the transfer happened in 2024, there is no transfer penalty. 

Transfers of exempt property (as per rules of the time of the transfer) would not result in ineligibility. For example, there would be no transfer penalty for someone who had $125,000 in total assets in 2023 and made a transfer of $100,000, which was under the $130,000 asset limit for that time period. 

Please note that a transfer penalty would only be applied to those entering a nursing home on Medi-Cal and not to applicants or beneficiaries living in the community. Prior to imposing a period of ineligibility, the applicant’s case must be reviewed for “undue hardship” by the Medi-Cal caseworker and receive approval from the DHCS, Medi-Cal Eligibility Division. (ACWDL 23-28)

Example: Transfers made prior to January 1, 2024

In December of 2023, Maya cashed out her retirement account and transferred the entire $250,000 to her daughter. In June of 2024, she applies for Long-Term Care Medi-Cal because she entered a nursing home. As the county will review the 25 months prior to 2024, the transfer could create a period of ineligibility. To find out the period of ineligibility, please see the calculation below: 

$250,000 (amount transferred)  $12,608 (APPR) = 19.82

Maya’s period of ineligibility will be 19 months because Medi-Cal does not count partial months. Per ACWDL 23-28, the county has to submit the period of ineligibility for approval to DHCS. DHCS will review if the period of ineligibility will impose undue hardship. 

Assets in any amount can be transferred at any time to a blind or disabled child of any age. The child’s disability must meet the requirements under the Social Security Act, i.e., the child must meet the disability requirements for SSA or SSI disability benefits. Transfers of a home or any asset to a blind or disabled child will not affect the Medi-Cal beneficiary or applicant’s eligibility. However, a transfer of liquid assets may impact the benefits of a child who is receiving SSI benefits, in which case an SSI specialist should be consulted. Assets can also be transferred at any time to a spouse without any penalties. 

G. Spousal Impoverishment Laws

Skilled nursing residents who are married or have a registered domestic partner may be eligible for spousal impoverishment protections. Under spousal impoverishment, the spouse at home (also referred to as the “community spouse”) can keep any income received in their name without having to contribute to the institutionalized spouse’s monthly resident cost in the nursing home. For example, if the community spouse receives a monthly income of $5,000, they can keep it all without contributing to the Medi-Cal recipient’s monthly resident cost.

However, if the community spouse is low-income, California law allows the community spouse to keep a minimum monthly maintenance needs allowance (MMMNA). The current (2025) MMMNA is $3,948 and increases annually. If the community spouse makes less than the MMMNA of $3,948, they can receive an allocation from the institutionalized spouse’s income until they reach the $3,948 MMMNA.

Example:

Seth and Logan are registered domestic partners. Seth recently entered a nursing home and was approved for Long-Term Care Medi-Cal with spousal impoverishment. Seth’s monthly income is $3,000. Logan’s monthly income is $1,435, which is below the MMMNA, allowing him to receive an allocation from Seth. 

Step 1: Find Maximum Allocation to Community Spouse

  $3,948     MMMNA

-$1,435     Community Spouse Income

  $2,513     Max. Allocation to Community Spouse

Seth can allocate to Logan up to $2,419 of his own income so that Logan can meet the MMMNA. 

Step 2: Calculate Monthly Resident Cost

  $3,000    Institutionalized Spouse Income

-$2,513    Max. Allocation to Community Spouse

     $487    Remaining income after allocation

     -$35     Personal Needs Allowance

    $452     Institutionalized Spouse’s Monthly Resident Cost

Seth’s monthly resident cost to the facility is $546 after allocation to Logan.

The couple can also file for a fair hearing to increase the MMMNA to generate additional income and/or obtain a court order to obtain additional income-generating resources.

H. Family Allocation

Under federal and state laws, Medi-Cal recipients can allocate additional income for the support of a dependent “family member” when there is a community spouse at home. Family members include only natural or adopted minors or dependent children or dependent parents or siblings of the institutionalized or community spouse who are residing with the community spouse. For the children to receive the maximum family member allocation, there must be a community spouse. Grandparents who have legal guardianship over grandchildren have been hit hard by this onerous rule, and foster children are not considered “children” or even “family members” for the purposes of long-term care Medi-Cal.

The family member base allocation amount, which is used to determine how much income the long-term care beneficiary may allocate to family members, is increased annually. The current amount, $2,555, is effective July 1, 2024, through June 30, 2025. Of course, the allocation is only possible if the institutionalized spouse has sufficient income left over after the spousal allocation to the community spouse.

The family allocation is calculated separately for each family member. Any income is deducted from the maximum allocation, and the remainder is divided by 3 to arrive at the total maximum allocation. If the child or children receive no income, the maximum family allocation amount would be $821 for each child.

$2,555 (maximum family allocation)

    -300 (Social Security income received by child)

$2,255 divided by 3 = $751 maximum family allocation for each child

(source: ACWDL 24-07; Form MC 176 W, section IX)

I. Medi-Cal Recovery

Medi-Cal applicants, beneficiaries, and their spouses should always be aware of the Medi-Cal recovery rules and plan ahead if they want to avoid recovery on their home or other assets. For detailed information on the Medi-Cal Recovery program, see CANHR’s consumer booklet on Medi-Cal Recovery, https://canhr.org/wp-content/uploads/Medi-Cal_Recovery.pdf

In-Home Support Services (IHSS) Program

The new "No Assets" Medi-Cal will also mean many more cases of eligibility for In-Home Support Services (IHSS).  The best article applying the new eligibility rules to IHSS is put out by the American Council on Aging, updated as of March 19, 2025.  I reprint it here in its entirety:

Overview of Medi-Cal’s In-Home Supportive Services Program

The In-Home Supportive Services (IHSS) Program is a statewide Medi-Cal program that provides long-term services and supports for California residents who are aged, blind, or disabled and at risk of nursing home placement. Available benefits include personal care assistance and homemaker services to assist these individuals in living safely and independently in their home or the home of a loved one. Program participants have the option to self-direct their care, which allows them to choose and hire their own caregivers, including friends and relatives.

Within IHSS, there are 4 programs, the first two of which serve the majority of IHSS program beneficiaries.

• Community First Choice Option (CFCO)—for Medi-Cal-eligible persons who require a Nursing Home Level of Care.
• Personal Care Services Program (PCSP)—for Medi-Cal-eligible aged, blind, or disabled individuals who require personal care assistance, but do not require the level of care that is provided in a nursing home.
• IHSS Plus Option Program (IPO)—provides payment to spouses or parents of Medi-Cal eligible persons who do not need a Nursing Home Level of Care, but require care assistance and receive it from a spouse or parent. Prior to becoming a Medi-Cal State Plan Option, this program was called the IHSS Plus Waiver.
• IHSS Residual Program (IHSS-R)—provides a pathway of eligibility for persons who are not eligible for Medi-Cal, but require In-Home Supportive Services.

The In-Home Supportive Services Program is available through California’s Regular State Medicaid Plan. In California, the Medicaid program is called Medi-Cal.

HCBS Medicaid Waivers versus HCBS State Plan Medicaid?
While Home and Community Based Services (HCBS) can be provided via a Medicaid Waiver or a state’s Regular Medicaid plan, HCBS through Medicaid State Plans are an entitlement. Meeting the program’s eligibility requirements guarantees an applicant will receive benefits. On the other hand, HCBS via Medicaid Waivers are not an entitlement. Waivers have a limited number of participant enrollment slots, and once they have been filled, a waitlist for benefits begins. Furthermore, HCBS Medicaid Waivers require a program participant to require the level of care provided in a nursing home, while State Plan HCBS do not always require this level of care.

Benefits of the In-Home Supportive Services Program

Following is a list of benefits available via the In-Home Supportive Services Program. Program beneficiaries only receive the services required to safely remain in their homes. A needs assessment determines the services a program beneficiary requires and the number of monthly service hours a program beneficiary can receive. Maximum hours are approximately 195/month for those without severe impairments, while persons severely limited in their functional ability can receive up to approximately 283 hours of care per month.

• Homemaker Services—housecleaning, laundry, shopping, errands, and cooking
• Paramedical Services—wound care, catheter care, injection assistance, blood sugar checks
• Personal Care Services—non-medical assistance with daily living activities, such as bathing, dressing, toileting, and eating
• Protective Supervision—supervision for cognitively or mentally impaired persons to help prevent accidents and injuries
• Teaching / Demonstration Services—provider taught tasks to teach beneficiary to do housework, prepare meals, bathe, etc.
• Transportation Assistance—escorting to & from medical appointments
• 
  

IHSS services may be received in one’s home or the home of a family member. Persons cannot live in a community care facility or long-term care facility. This includes assisted living residences and adult foster care homes. Note: Persons who reside in long-term care facilities and have a planned discharge to return home can apply for IHSS prior to being discharged.

Another option that California residents might want to consider is the Medi-Cal Community-Based Adult Services Program. Although not available statewide, this program offers out-of-home daytime care and supervision at designated CBAS centers.

Eligibility Requirements for In-Home Supportive Services

The IHSS Program is for California residents who are elderly (aged 65+), blind, or disabled. While additional eligibility requirements may vary based on the program within IHSS, the following is the general criteria.

Financial Criteria: Income & Assets Income

The applicant income limit is equivalent to 138% of the Federal Poverty Level (FPL). While this figure increases annually in January, for California Medicaid, the income limits increase each April. Effective 4/1/25, the monthly income limit for the IHSS program for a single applicant is $1,801. When both spouses are applicants, there is a couple income limit of $2,433/month. When only one spouse is an applicant, the income of the non-applicant spouse is not counted towards the income eligibility of their spouse. Only the applicant spouse’s income is considered, which is limited to $1,801/month.

Assets
There is no asset limit (effective 1/1/24). An applicant’s assets, regardless of value, are not considered in the eligibility process.

There is a Look-Back Period, during which Medi-Cal scrutinizes past asset transfers of persons applying for nursing home care, but it is not applicable to persons applying for the In-Home Supportive Services Program. However, if one may require Nursing Home Medicaid in the near future, it may be applicable. With the elimination of the asset limit, assets transferred on or after 1/1/24 are not considered. Assets transferred prior to 1/1/24 are still being scrutinized, but the 30-month “look back” is being phased out month-by-month and will no longer exist by July of 2026.

While all assets are disregarded when determining Medi-Cal eligibility, one’s assets are not necessarily safe from the Medicaid Estate Recovery Program (MERP). Following the death of a long-term care Medicaid beneficiary, the state attempts reimbursement of long-term care costs for which it paid for that individual via their remaining estate. This may include one’s home. With the utilization of proper planning strategies, one can protect their home and other assets from being used as reimbursement and instead go to loved ones as inheritance. Contact a Certified Medi-Cal Planner for assistance.

Medical Criteria: Functional Need

A Nursing Home Level of Care is not necessarily a requirement to receive care services via Medi-Cal’s In-Home Supportive Services Program

An applicant must have a medical need for care services and be at risk of institutionalization (nursing home care) without program assistance. Recall that within the In-Home Supportive Services Program there are 4 subprograms. To be eligible for the Community First Choice Option, an applicant must require a Nursing Facility Level of Care (NFLOC). Upon application for the IHSS program, a needs assessment is completed by the social services agency in one’s county. As part of the assessment, an applicant’s care needs are ranked from 1 to 6. A ranking of 1 indicates that an individual can function independently, while a ranking of 6 indicates an individual requires the greatest level of care available through the program. An applicant’s ability to independently complete Activities of Daily Living (i.e., transferring from the bed to a chair, mobility, eating, toileting) is one area that is considered during the assessment. Relevant to some persons with Alzheimer’s disease or a related dementia, cognitive functioning, such as one’s capacity to retain information or problem solve, are also considered. A diagnosis of dementia in and of itself does not mean one will meet a NFLOC.

Qualifying When Over the Limits

Having income over Medicaid’s limit does not mean an applicant cannot still qualify for the In-Home Supportive Services Program. Medi-Cal has a Share of Cost program, also called a Medically Needy Program. With this program, an applicant with income over Medi-Cal’s income limit qualifies for the program by paying a “share of cost” for their care services / medical expenses (i.e., paying their IHSS caregiver). This can be thought of as a deductible and is based on one’s monthly income. Once one has paid their share of cost for the month, the IHSS Program will pay for services and supports the remainder of the month. Professional Medicaid Planners can assist persons in lowering their “share of cost”. Find a Medi-Cal Planner.

How to Apply for In-Home Supportive Services Program Before You Apply

Prior to submitting an application for the IHSS Program, applicants need to ensure they meet the eligibility criteria. Applying when over the income limit may be cause for denial of benefits. The American Council on Aging offers a Medicaid Eligibility Test to determine if one might meet Medicaid’s eligibility criteria.

Applicants will need to gather documentation to be submitted with their application. Examples include proof of income and copies of Social Security and Medicare cards. Unfortunately, a common reason applications are delayed is required documentation is missing or not submitted in a timely manner.

Application Process

To apply for the In-Home Supportive Services Program, applicants should contact the IHSS office in their county and submit an Application for In-Home Supportive Services (SOC 295). Persons not currently enrolled in Medi-Cal must apply via the Application for Health Insurance. Persons can apply for Medi-Cal independently of applying for the IHSS Program or at the same time.

As part of the IHSS application process, an in-home functional needs assessment is completed by a county social worker to determine if services are required to safely live at home, and if so, the level of assistance required. A Health Care Certification Form (SOC 873) must be completed and submitted by a licensed health care professional prior to services being provided. Program applicants will receive a notice of action (NOA) indicating whether they have been approved or denied for IHSS services. If approved, the authorized services and total monthly hours of services permitted will be included.

Learn more about the In-Home Supportive Services Program. Alternatively, persons can contact their local IHHS county office.

The In-Home Supportive Services Program is administered by the California Department of Health Care Services (DHCS) and the California Department of Social Services (CDSS).

Approval Process & Timing

The Medi-Cal application process can take up to 3 months, or even longer, from the beginning of the application process through the receipt of the determination letter indicating approval or denial. Generally, it takes one several weeks to complete the application and gather all of the supportive documentation. If the application is not properly completed, or required documentation is missing, the application process will be delayed. Based on federal law, Medicaid offices have up to 45 days to complete this process (up to 90 days for disability applications). Despite the law, applications are sometimes delayed even further.