Nursing home care can be very expensive. Many private health insurance policies don’t cover these long-term care services. For California residents who need long-term care, Medi-Cal is the most common source of funding. In fact, Medi-Cal covers nursing home care expenses of nearly 65% of Californians residing in nursing homes. However, applying for and receiving assistance from Medi-Cal takes planning. Getting your parents prepared for the potential need for long-term health care, nursing home planning is a must.
Medi-Cal and nursing home care
Medi-Cal is California’s state Medicaid program. Like all other Medicaid programs, it is funded by both federal and state funds but run by the State. The California Department of Health Care Services (DHCS) manages long-term care programs in California, including nursing home services. In general, skilled nursing facilities offer round-the-clock skilled nursing care in addition to other supportive services. Nursing homes are typically rather expensive, averaging approximately $7,000 per month in California. Most people cannot afford to pay their own nursing home expenses. That is where Medi-Cal benefits come in.
Payment for “medically necessary” nursing home services
Med-Cal benefits are limited when it comes to nursing home benefits. Medi-Cal only pays for nursing home services when those services are deemed “medically necessary.” California defines that term “medically necessary” as “reasonable and necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain.” In order for Medi-Cal to pay for a nursing home stay, the patient’s treating physician must prescribe that nursing home case based on the need for continuous, around-the-clock skilled nursing care services. This type of care may also be referred to as “intermediate care.”
Limitations on assets to be eligible for Medi-Cal
There are limitations on assets in order to qualify for Medi-Cal long term care benefits, which are $2,000 for an individual and $3,000 for a couple when both spouses are institutionalized. When one spouse is at home, an additional $119,220 of “countable” assets can be protected. Only certain assets are counted towards your asset limit. Your residence will not be counted if your spouse still lives there or if you intend to return to that residence when you leave the nursing home. Other assets that are generally not counted include one vehicle, personal belongings, and small burial or life insurance policies.
You may be able to “spend down” your assets
You may be allowed to “spend down” your assets so that you qualify for Medi-Cal. “Spending down” means you can use your assets to pay off legitimate debts or expenses. However, you must be careful. If you feel you need to spend down your assets, consult with an experienced and qualified Medi-Cal lawyer first in order to avoid fraudulent transfers and a penalty period that will affect your benefits.
Will the nursing home take my house?
A prevalent concern among many clients is whether they will lose their homes after moving into a nursing home. The truth is, your home may not even be counted as an asset for purposes of qualifying for Medi-Cal. In every state, Medicaid recipients are allowed to keep their homes, regardless of equity, as long as their spouse or another dependent lives in the home.
Estate recovery after your death
Once you die, though, the Medi-Cal Recovery Department will pursue a claim against your home in order to recoup the benefits paid for your care from your estate. This is known as “estate recovery.” In most cases, the only property of any substantial value that a Medi-Cal recipient has at the time of his or her death is the home. But, there are ways to protect your home from estate recovery. Consult with an experienced and qualified elder law attorney to determine your options.
If you have questions regarding nursing home planning or any other Medi-Cal 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.