Despite the fact that you likely want to remain in your own home, the reality is that there may come a time when you need the type of care that can only be provided by a long-term care facility. If that time comes, you may need to turn to Medi-Cal for help paying your long-term care (LTC) bill. One of your concerns about turning to Medi-Cal for help may be the perceived impact relying on Medi-Cal will have on your spouse who plans to remain in the community. To alleviate those concerns, we will explain the Medi-Cal Community Spouse Resource Allowance and other Spousal Impoverishment rules.
Long-Term Care By the Numbers
Like most people, you likely hope to grow old in your own home without ever needing to enter a long-term care facility. Statistically speaking, however, you stand more than a 50 percent chance of needing long-term care (LTC) at some point after you reach retirement age (age 65). Those odds continue to increase the longer you live. At age 85, you will stand a 75 percent chance of needing LTC before the end of your life. Because the chance of needing LTC is very real, it only makes sense to plan for the possibility that you will need to pay for LTC at some point in the future.
How Will You Pay for the High Cost of LTC?
While we have access to excellent health care in the United States, we also pay a high price for that care. For the year 2018, the average cost of a year in LTC nationwide was about $100,000. California residents paid, however, paid noticeably more than the national average at an average of $118,000 for that same year. In the case of a stay of about three years, you are looking at an LTC bill of over $350,000 – and that’s if you need LTC today. Because neither Medicare nor most private health insurance policies will cover expenses related to LTC, many seniors faced with the need to pay for LTC turn to Medi-Cal for assistance.
Medi-Cal Eligibility Basics
To get help from Medi-Cal (California’s Medicaid program) with your LTC expenses, you must first qualify for the program. The Medi-Cal eligibility guidelines impose both an income and a “countable resources” (assets) limit. Typically, a couples’ income and assets are combined for the purpose of determining Medi-Cal eligibility. If a couple’s assets exceeded the program limit, those assets must be “spent-down” (sold or transferred) until the value drops below the limit. If the need to qualify springs from the fact that one spouse is in LTC, the spend-down requirement would clearly leave the other spouse (referred to as the “community spouse”) with no resources. Fortunately, the Medi-Cal “Spousal Impoverishment” rules protect a community spouse.
California Community Spouse Allowance
To ensure that the community spouse is not left with nothing, the Medi-Cal program now allows for a “division of assets.” It works like this: All non-exempt assets belonging to either spouse are added together. The community spouse is then entitled to keep a Community Spouse Resource Allowance equal to half of the total, but not more than $126,420 for 2019. That is also the minimum amount, meaning that even if $126,420 is more than half, the community spouse may still keep that much.
A couples’ income is treated similarly, allowing the community spouse to retain his/her own income, and potentially some of the LTC spouse’s monthly income. Medicaid established what is known as the “Minimum Monthly Maintenance Needs Allowance (MMMNA)” each year. The amount of the MMMNA is set by law and will vary each year depending on factors such as geographic area and household size. For 2019, the MMMNA in California is $3,161. If your spouse went into an LTC facility and your monthly income is less than $3,161, you may be able to also keep some of your spouse’s income.
Contact Roseville Medi-Cal Attorneys
Please download our FREE estate planning checklist. If you have additional questions or concerns about the Community Spouse rules, or about the Medi-Cal program in general, contact us at the Northern California Center for Estate Planning & Elder Law to find out today by calling (916)-437-3500 or by filling out our online contact form.