As we tend to live longer lives than past generations, more and more of us will wind up needing long-term care or moving into a nursing home or assisted living facility at some point. Among the many challenges facing seniors and their families when that time comes is the fact that such comprehensive care can easily cost between $4,000-$6,000 a month.
At that rate, a lifetime of savings – and the assets that were perhaps intended to be passed down to heirs – could be wiped out in short order. Medicare, which provides health insurance for the vast majority of the country’s seniors, is of minimal help – it only pays for up to 100 days of skilled nursing care.
But there is another option for folks trying to cover the high costs of care without depleting their own assets: Medi-Cal.
Medi-Cal is More Available Than You May Think
Medi-Cal is the state of California’s Medicaid program, and most people understandably think that its benefits are only available to those with extremely low incomes or who are facing financial difficulties. They may also think that they need to sell off all their assets and lose their home to qualify for Medi-Cal if they become sick.
The reality, however, is that that the nursing home expenses of approximately 65% of California nursing home residents are paid by Medi-Cal, and individuals and families with significant assets can still qualify for this assistance; it simply requires some forethought and skilled planning. There are a variety of ways to rearrange or transfer assets in a way that lets individuals qualify when previously they did not.
You Can Exempt and “Spend Down” Your Assets, But Be Careful
When you apply for Medi-Cal benefits, you are allowed to exempt certain assets when calculating your eligibility. These exempt assets include:
- Your primary home
- One vehicle
- Household goods and personal belongings
- Whole life insurancepolicies with a total face value of $1,500 or less.
- Term life insurance
- Prepaid burial plan (unlimited if irrevocable or up to $1,500 if revocable) and burial plot
In order to qualify for Medi-Cal, many individuals “spend down” their assets by paying for certain kinds of debts or expenses. While this is perfectly allowable, there are restrictions as to how and when you can transfer assets prior to applying for Medi-Cal and transfers that violate these restrictions can negatively impact if not eliminate the chances of qualifying for benefits. For example, Medi-Cal will look at any asset transfers that were made in the 60 months prior to filing your application to make sure that the transfers were legitimate and for fair value.
Meet With an Attorney
Qualifying for Medi-Cal to cover some or all of the costs of long-term care can be a complicated process, but one that could save you and your family a significant amount of money and provide peace of mind for everyone involved. It is important to start your planning sooner rather than later so you can maximize the amount of assets you can protect while still qualifying for benefits. Given the complexities of the law and the financial benefits of qualifying for Medi-Cal, it pays to retain an experienced estate planning and elder law attorney to assist you with the process.
Yee Law Group, PC: Sacramento and Roseville Elder Law Attorneys
If you are a senior or a loved one of a senior looking for answers and guidance on the important matters that arise as we age, Yee Law Group, PC, PC in Roseville is ready to assist you and provide responsive, accessible, and plain-spoken counsel. Please give us a call at (916) 599-7297 to discuss your issues and concerns. We look forward to the privilege of being your attorneys.