Many seniors qualify for Medi-Cal to help cover the high cost of long-term care (LTC). If you are one of those who currently relies on Medi-Cal, you may be concerned about the ramifications of relying on Medi-Cal. In fact, you may have heard stories about Medi-Cal taking assets after the death of a program beneficiary. Let’s look at what assets Medi-Cal seek to recover after you are gone.
Qualifying for Medi-Cal
Medi-Cal is the name given to California’s Medicaid program. For most seniors, the need for Medi-Cal eligibility stems from the prohibitive cost of LTC. The average cost for LTC in a nursing home in California is over $120,000 a year. Since neither Medicare nor most basic health insurance policies will pay for LTC, Medicaid is the only option for help covering LTC expenses for those who cannot pay out of pocket. Eligibility for Medi-Cal, however, depends on an applicant’s income and assets. To qualify, the value of your “countable resources” must fall below the program’s limit which is as low as $2,000 for an individual. If your father managed to qualify for Medi-Cal benefits you probably assumed that the assets he still owned were exempt, and therefore safe, from a Medi-Cal eligibility perspective. While that is likely true, it isn’t the end of the analysis.
Can the Medi-Cal Estate Recovery Program Threaten My Assets?
The purpose of the Medicaid Estate Recovery Program, or MERP, is to allow the individual states to try and recover some of the funds they spend on Medicaid recipients after the recipient’s death. The MERP rules allow the state to file a claim against the recipient’s estate, for the amount spent on the recipient, during the probate of the estate. MERP affects Medi-Cal members who are 55 and older, or those of any age who are cared for at an institution, such as a nursing home. For Medi-Cal members who die on or after January 1, 2017:
- Repayment will be limited only to estate assets subject to probate that were owned by the deceased member at the time of death.
- Repayment will be limited to payments made, including managed care premiums paid, for nursing facility services, home and community-based services, and related hospital and prescription drug services received when the member was an inpatient in a nursing facility or received home and community based services.
Where Does that Leave Your House?
Although the general rule allows Medi-Cal to take all kinds of assets, there are certain conditions under which those same assets are exempt from recovery. For example, Medi-Cal will not seek reimbursement from your father’s estate after his death if:
- His spouse/registered domestic partner is living
- He is survived by a child who was younger than 21 at the time of his death
- He is survived by a child of any age who is blind or disabled (as defined by the federal Social Security Act) as of the date of the Estate Recovery claim
- Pursuing the claim would create a substantial hardship. Requests for a hardship exemption must be filed within 60 days of the date the MERP claim letter is received
- The home is titled in a properly constructed trust.
Please download our FREE estate planning checklist. If you have additional questions or concerns about Medi-Cal planning or Medi-Cal estate recovery, contact the Sacramento Medicaid planning attorneys at the Northern California Center for Estate Planning & Elder Law by calling (916)-437-3500 or by filling out our online contact form.