Medicare and Medi-Cal are two government programs that have similar sounding names. In this post we will look at the differences between these two programs, and we will highlight the elder law implications.
Medicare is a health insurance program that is available to people who have earned sufficient retirement credits. You earn retirement credits while you are working and paying taxes.
The maximum accrual per year is four credits. In 2014, you earn one credit for every $1200 that you earn. Once you have accumulated 40 retirement credits, you will qualify for Medicare when you reach the age of eligibility. The age of eligibility is 65 years of age at the time of this writing.
Because of the relatively modest earning requirements, the majority of seniors will qualify for Medicare.
Medi-Cal is also a government run health insurance program. It is a jointly administered federal/state program. In California it is called Medi-Cal, but it is called Medicaid throughout the rest of the country.
Differences Between Medi-Cal and Medicare
Unlike Medicare, Medi-Cal is a need-based program. You must be able to demonstrate significant financial need if you want to qualify for Medi-Cal. Eligibility has nothing to do with the accumulation of retirement credits. This is one of the differences.
For the most part, Medicare is only available to senior citizens, though there are limited exceptions. Medi-Cal is potentially available to people of all ages.
There is another huge difference between Medi-Cal and Medicare that has elder law implications. Most of the senior citizens in the United States will someday need assistance with their day-to-day needs. Medicare will not pay for long-term custodial care.
Assisted living communities and nursing homes are extremely expensive. In the state of California, the average annual cost for a private room in a nursing home exceeds $100,000, and costs have been rising.
Medi-Cal will help with long-term care costs. This is why Medi-Cal becomes relevant to many seniors who were never financially needy throughout their lives.
People who do in fact have some resources often engage in something called a Medi-Cal spend down. This is a divestiture of assets. You could essentially give your children their inheritances in advance as you aim toward Medi-Cal eligibility.
However, program rules are complex. Careful and informed planning is required. It is important to work with an experienced and qualified elder law attorney who works in the area of Medi-Cal planning.
Special Report on Medi-Cal Planning
There is a lot to take into consideration if you are interested in future Medi-Cal coverage. Our firm has prepared an informative special report that takes an in-depth look at this government health insurance program.
We encourage you to download your copy of this report, which is being offered free of charge at the present time.
To obtain your copy of the free special report, click this link and follow the simple instructions: Free Report on Medi-Cal Planning.