Medi-Cal Planning and Long Term Care
The cost of nursing home care in the Bay Area, on average, ranges from $4,000 - $6,000 a month, or $48,000 - $72,000 a year. If it is inevitable that you, a friend or a loved one needs to go into a Skilled Nursing Facility, and lack sufficient Long Term Care Insurance or other resources to cover the cost of care, the eventually it may become necessary to apply for Medi-Cal.
Medi-Cal is the payor of last resort when it comes to paying for nursing home care, so before someone qualifies for Medi-Cal they have to pass both the Income Test and the Asset Test. The Income and Asset tests tell you how much money and assets you can have and still qualify for Medi-Cal benefits, or in other words, these are the limits you must 'Spend Down' to before you can qualify for benefits.
For both married couples and single individuals, the following assets are considered 'exempt', and do not count against you when qualifying for Medi-Cal benefits.
For a married couple, where one spouse is staying at home they can only retain:
- Personal Items and Furnishings
- Assets to produce income up to the limits
- Prepaid Funeral
- Life Insurance of up to $1,500 face value
If you are a single person, the amounts are far lower, as you can only retain:
- $2,319 in combined monthly income
- $92,760 in assets
Assets in excess of the $92,760 per couple or $2,000 for individual must first be spent on your own nursing home care
- $35 a month in income
- $2,000 in assets
Monthly income in excess of the $2,319 per couple or $35 per individual must be paid to the nursing home, and Medi-Cal will pay the difference.
When applying for benefits Medi-Cal requires 30 months of past financial records to verify that the spend down was done properly and that assets were not just 'given away' for no value in order to qualify for Medi-Cal. If they discover that the spend down was not done properly they will impose a penalty of on one month of ineligibility for every $4,415 that was not properly spent.
So for example, if during the 30-month look back period they see that you gave away 176,600, then you would be ineligible for Medi-Cal benefits for 40 months.
The good news is that there are legal methods to avoid the spend down and preserve your assets for the benefits of loved ones and still qualify for Medi-Cal. Our office is experienced in helping clients preserve what little they have left and avoid having to spend the balance of their savings on their own care.