Medicaid is a government health insurance program that is potentially available to people who have very limited financial resources. It is jointly administered by the federal government along with each respective state government, and in California, the program is called Medi-Cal.
There is an asset limit of $2000 for an individual applicant, but some of your belongings are not considered to be countable. Your home is not a countable asset, and you can retain ownership of one vehicle that is used for transportation.
Term life insurance is life insurance that you cannot convert to cash. Term life insurance policies are not countable, but there is a $1500 limit on non-term insurance policies combines. Such policies do have cash value that is countable.
A wedding ring,engagement ring, and any heirloom jewelry that you may have in your possession are not countable assets for Medi-Cal purposes. Household belongings and personal effects are not countable, and burial plots are excluded.
The rules for what is countable and not countable are complex and sometimes appear arbitrary. It is not a good idea to attempt to navigate these treacherous waters by yourself.
You may feel as though Medi-Cal is not relevant to you, because you have assets, and you will qualify for Medicare. However, Medi-Cal is important to many seniors who were never financially needy, because Medicare will not pay for long-term care except under limited and short-term circumstances.
The majority of seniors will likely someday need help with their activities of daily living, so this is a very significant gap. Custodial long-term care is very expensive, and the costs could consume everything that you intended to leave behind to your loved ones if you had to pay out-of-pocket.
According to Genworth Financial annual survey, the median annual charge for a private room in a nursing home in California is just over $104,000. Assisted living communities are also expensive. The median charge for a year in a private one-bedroom unit is $45,000.
People who want to qualify for Medi-Cal to pay for long-term care often give assets to their loved ones before they apply. However, this takes careful advance planning, because, if done incorrectly, there is a 30 month look-back in the state of California.
You often have to complete your gift giving at least 30 months before you submit your application. If you give away assets within this 30 month window, you can be penalized, and your eligibility can be delayed for many months. Experienced and qualified elder law attorneys know all about the “look back” period and can assist you with planning within the 30 months of application that does not trigger the penalty.
Learn More About Medi-Cal
Medicaid pays for most of the long-term care that is received by seniors in the United States, so you should certainly understand the program thoroughly if you want to be comprehensively prepared for the eventualities of aging.
We have prepared a special report on Medi-Cal planning, and the report is being offered on a complimentary basis. Visit the Reports section of our web site to obtain your free copy.
Schedule a Consultation
If you would like to discuss Medi-Cal planning with an experienced and qualified elder law attorney, simply contact our office.