Q. My wife and I are both age 60, in good health and have very modest incomes. We are not yet eligible for MediCare. In the past, we were told that we were not eligible for Medi-Cal because we have some savings and because we are not disabled. Has any of this changed under the new health care law?
A. Yes, indeed. Under the Patient Protection and Affordable Care Act (“ACA”), aka Obamacare, Medi-Cal coverage will now be available to individuals aged 19 to 64 based upon their incomes, alone, and without regard to the value of their assets or whether they are disabled. The goal is to expand health care coverage for an estimated one million Californians who could not previously qualify because of the traditional asset or disability test. This provision of the ACA is called “Medi-Cal Expansion”.
This expansion coverage – available only for those under age 65 and not on MediCare — represents a significant break with traditional Medi-Cal. Formerly, to qualify for Medi-Cal, all applicants had to show that they were disabled or over age 65 and that they had less than $2,000 in the bank.
To qualify for coverage, annual household income must be less than 138% of the Federal Poverty Level, which calculates as follows for 2014: One person: $15,856; Two Persons: $21,404; Three Persons: $26,951; Four persons: $32,499. Persons whose household modified adjusted gross incomes are less than these ceilings will now be eligible for Medi-Cal regardless of the value of their assets and regardless of disability. Further, they will not be obliged to purchase private health care insurance, will have no premium cost for healthcare coverage, and will incur no share of cost (“co-pay”) for health care services.
This Expansion Medi-Cal coverage will potentially benefit all persons under age 65 with modest incomes. However, the coverage groups that will likely most benefit will be the following:
a) Long-Term Unemployed: persons in this group no longer have employment-based health coverage and typically have very modest incomes, even though they may have significant savings from prior employment;
b) Persons Caught in the Two-Year Medicare Wait Period: persons under age 65 who become disabled and qualify for Social Security Disability find that there is a two-year wait before they qualify for Medicare. These individuals may now qualify for Medi-Cal during this coverage gap;
c) Disabled Persons with Some Assets: formerly, disabled persons who needed Medi-Cal coverage could not accumulate savings of more than $2,000. In order to preserve eligibility, excess resources would have to be spent down or transferred into a Special Needs Trust to be managed by others. Under the new rules, disabled persons under age 65 will now be able to accumulate savings and, if able to do so, manage their own resources without disqualifying themselves from Medi-Cal healthcare coverage.
In short, for those uninsured persons under age 65 and not on MediCare, the Expansion Medi-Cal program offers a real opportunity to secure healthcare coverage. To apply go to www.CoveredCa.com or call 1-800-300-1506.
Note: When these individuals later turn 65, and should they then desire to retain Medi-Cal coverage (e.g., to help with MediCare co-pays, In Home Supportive Services, or nursing home costs), they will need to re-qualify under the more traditional asset-based rules. If they then need to reduce their countable assets to maintain eligibility, they should seek professional guidance to avoid running afoul of the Medi-Cal asset transfer rules.
Reference: 2017 Federal Poverty Level Rates, published in ACWDL 17-10 (03/03/2017);
2021 Federal Poverty Level Rates, published in ACWDL 21-01 (01/27/2021)