Even if you are healthy now, you should not overlook the need to plan for future long-term care. How can you know how healthy you will be 30 or 40 years from now? The truth is, an unexpected injury could leave you with health issues that ultimately require long-term care as well. More than two-thirds of all residents over the age of 65 need long-term care at some point in their lives. Therefore, it would be a mistake to overlook Medi-Cal planning. Here are the answers to some of the most commonly asked questions regarding Medi-Cal in California.
Q. What is Medi-Cal?
Medi-Cal is basically a benefits program for which you can qualify in a few different ways. These are referred to as eligibility categories. For instance, SSI-Linked Medi-Cal is an eligibility category which allows individuals who qualify for SSI to automatically qualify for Medi-Cal benefits. There are more than 90 eligibility categories, each with its own rules and requirements. Once you meet the requirements of any eligibility category, you are considered eligible for either full or partial-scope Medi-Cal.
Q. How does Medi-Cal work for California residents?
Medicaid, or Medi-Cal as it is known in California, is largely an income-based health care assistance program. Federal, state and local tax funds are used to aid eligible individuals with paying their medical expenses. Generally, Medi-Cal recipients are only required to pay a small co-payment for covered medical expenses, if anything at all. Medi-Cal will typically pay for some in-home services, but only if a physician certifies that home care services are actually needed for specified medical reasons.
Q. What are the eligibility requirements for Medi-Cal?
If your family has income at or below 138% of the Federal Poverty Level, you may be eligible for Income-Based Medi-Cal. If you are aged or disabled, you may be eligible for Aged & Disabled Federal Poverty Level Medi-Cal. If you are disabled and working, you may be eligible for California’s Working Disabled Program.
Q. Can I qualify as Medically Needy?
If you are aged, blind, or disabled, but your income is too high for other Medi-Cal programs, you may be eligible for Aged, Blind, and Disabled – Medically Needy Medi-Cal. For this program, you may need to “spend down” a certain amount of your own money before Medi-Cal begins to pay for medical services. This payment is called a share of cost.
Q. Why would I need Medi-Cal if I’m healthy?
Far too often, people overlook the fact that illness is not the only reason you may need long-term care. For instance, if you suffered a terrible injury following an automobile accident, there is certainly a possibility that you will need long-term care in order to fully recover from that injury. In many cases, loved ones are admitted to nursing homes because of the need for daily assistance with activities such as dressing and grooming, simply as a result of aging.
Q. Won’t my health insurance cover the cost of long-term care?
Regrettably, far too many people misjudge the real cost of long-term care, which is typically rather expensive. The average annual rate of long-term care in California is more than $90,000. Add to that the likelihood that nearly half of the California citizens age 65 and older need long-term care for approximately five years. That can be overwhelming enough. Yet, there is a common misconception that Medicare and private health insurance will be sufficient to cover the costs of long-term care. In reality, they cover very little of these costs.
Q. How does using an annuity help with Medi-Cal planning?
An annuity is a fixed sum of money paid to an individual every year for a specific period of time. If your annuity is considered Medi-Cal compliant that means it qualifies as a special type of annuity that will not put your Medicaid eligibility at risk. In many cases, a Medi-Cal compliant annuity is known as a Single Premium Immediate Annuity (SPIA), which can be converted so that it pays out over the annuitant’s life expectancy. Great caution must be used when considering whether or not to use an annuity in Medi-Cal planning as there are unscrupulous annuity salespersons who may misrepresent the characteristics of an annuity just to make a sale.
Q. Why is Medi-Cal planning necessary?
The purpose of Medi-Cal benefits is to assist low-income California residents in paying for medical services. Because Medi-Cal is a needs-based program, recipients can have no more than $2,000 in assets. The goal of Medi-Cal planning is to keep you from exhausting all of your resources in order to be eligible for benefits.
Similarly, if an applicant for Medi-Cal gives away property or assets right before submitting an application, those transfers of property can be seen as fraudulent and result in your benefits being delayed or denied. However, with careful Medi-Cal planning, you can avoid the appearance of fraudulent transfers.
If you have questions regarding Medi-Cal eligibility, or any other elder planning needs, contact the Northern California Center for Estate Planning and Elder Law for a consultation, either online or by calling us at (916) 437-3500.