How To Protect Your Estate From Catastrophic Nursing Home Costs

Medi-Cal Planning for Medi-Cal Benefits

If you or your spouse enters a nursing home, the cost of the nursing home may wipe out your life’s savings. With proper planning you may be eligible for Medi-Cal (California’s version of Medicaid). If you or your spouse qualifies for this public benefit, Medi-Cal will pay for the high cost of nursing home care. Currently, nursing home fees average between four to six thousand dollars per month.

Medi-Cal Planning for Medi-Cal Benefits can save your Life Savings

An individual who is age 65 or older, blind, or disabled will be eligible for Medi-Cal benefits in a skilled nursing facility if he or she meets certain income or resource limitations. If you are single, you cannot have more than $2,000 in non-exempt assets and you cannot keep more than $35 a month in income. If you have more than $35 a month in income, you may still be eligible for Medi-Cal, if you pay a share of cost.

If you are married, in addition to the $2,000 you may keep in non-exempt assets, your spouse may keep certain non-exempt assets. Also, in addition to the $35 or more a month you may keep in income, your spouse may keep a certain amount of income per month. If you and your spouse have more than these income limits you may be eligible for Medi-Cal, if you pay a share of cost.

There are certain assets which the Medi-Cal beneficiary may own without affecting his or her eligibility. These assets are called exempt assets and include: the principal residence, household items, personal effects, burial arrangements, automobiles, musical instruments, etc.

Eligibility for Medi-Cal may be denied if an applicant has transferred assets, made gifts, or in any way relinquished ownership of property without receiving adequate consideration. In addition to that, certain transfers of assets may be considered a Federal crime.

If you do not meet the eligibility requirements, there are certain planning strategies that our office may be able to assist you with in order to qualify for Medi-Cal.

One of the most powerful planning strategies to qualify for Medi-Cal involves a Court Order. This planning strategy is very effective for married couples when one is in a nursing home. A document known as a Petition is filed with the Court. The Petition asks the Court for an Order directing the spouse in the nursing home to support the spouse at home. The Court may order the spouse in the nursing home to transfer assets and/or income to the spouse at home. This procedure may enable the spouse at home to retain all of his or her assets and/or income and qualify the spouse in the nursing home for Medi-Cal.

John Donahue can guide you through other planning strategies to qualify for Medi-Cal. These other planning strategies include but are not limited to:

  • permissible spending of money,
  • converting non-exempt assets to exempt assets,
  • repairing or improving exempt assets,
  • paying off debts,
  • etc.

In order to qualify for Medi-Cal you will need to go through an involved application process. Mr. Donahue can assist you in this often complicated application process.