Q. My mother will need care in a Nursing Home, but the cost is beyond our reach. I understand that Medi-Cal can help subsidize that cost if she were eligible for that financial assistance. I also heard that there are new rules now in place that may make it easier for her to qualify. Can you shed any light on this, and is there still a role for advance planning?
A. Yes, and you heard correctly! Because of legislation (AB 133) signed by Governor Newsom, and fully effective this year, Medi-Cal has abandoned its long-standing asset test for all categories of Medi-Cal.
Until this year, there were, broadly speaking, two categories of Medi-Cal: (1) Medi-Cal for those under age 65, who qualified under the Affordable Care Act by reason of having modest incomes (where assets did not count), and (2) Medi-Cal for those over age 65 and the disabled, who qualified by reason of having “countable resources” under certain limits (that is, where assets did count, although income only counted toward their “co-pay” or “Share of Cost”). Asset resources did not count for the younger group, but did count for the older group. Now, they no longer count for either group! With this transformative change in the law, eligibility for the older group is now in sync with the younger group. In short, the value of assets is no longer disqualifying for either group. This comes as very welcome news for many seniors.
That said, there is certainly a role for advance planning, especially for seniors, and I am glad you asked that question. Here are some bullet points:
1) Income still matters: For seniors, income is still considered for purposes of determining whether he or she will have a monthly Share of Cost for the care received. While the rules regarding income are different for care received in a nursing home, as compared with care received at home, there are still lawful planning strategies available to shelter that income. These strategies can be helpful so as to either minimize the patient’s monthly Share of Cost or eliminate it entirely. For example, in appropriate cases, certain trusts may be used to shelter income generated by income-producing assets, in full compliance with the Medi-Cal rules. Furthermore, know that some Medi-Cal options are only available when the beneficiary’s Share of Cost has been reduced to zero. One such option is the Assisted Living Waiver Program, which provides a Medi-Cal subsidy for care in assisted living facilities for those who qualify. Other programs are only helpful where the Share of Cost is substantially below the actual cost of care, such as the In Home Supportive Services (“IHSS”) Program.
2) Estate Recovery: When the Medi-Cal beneficiary dies, Medi-Cal looks to his or her estate to determine if it may recover payments made on his or her behalf. In this regard, estate recovery is now limited to cases where the patient’s estate is administered in a formal probate proceeding. Thus, in order to avoid Estate Recovery, Medi-Cal planning may include strategies to hold assets in certain trusts and/or creating financial accounts with named death beneficiaries.
3) Good Planning Documents are still essential: It is still essential to have good planning documents in place, such as a Durable Power of Attorney containing the requisite Medi-Cal planning powers: should you become incapacitated, these powers may be necessary for your designated agent to use so as to enable him or her to help you take advantage of the new rules. And these powers should always be coordinated with your trust and meet your other estate planning objectives. So, advance planning is just as essential as before.
Medi-Cal has been issuing new rules and guidance to help Medi-Cal eligibility workers comply with the new law and to assist advocates, such as myself, help their clients. So, stay tuned as the new law moves forward and good wishes to you and your mother on securing a Medi-Cal subsidy to help with the cost of her care.
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Note: Be mindful that the new rules for Medi-Cal do not change the rules for other public benefit programs, such as the Supplemental Security Income (“SSI”) program. Indeed, the SSI program still has an asset cap of only $2,000 for a single individual and $3,000 for a married couple. So, persons who rely upon other public benefit programs, such as SSI, must be sure to take this into account. Also, know that California is unique among the states; no other state has thus far eliminated its asset cap for what is called “Medicaid” in the rest of the country. So, if one plans on relocating to another state, be sure to take this fact into account, as well.