Along with the new beginnings that come along with a New Year, also come the new "numbers' for Long Term Care Medi-Cal Eligibility in California.
Here is a brief outline regarding eligibility factors for ONLY the Medi-Cal Long Term Care Program.
I. ELIGIBILITY FOR MEDI-CAL
Criteria: (1) Must be over 65 yrs of age; disabled or blind
(2) Resources (property, assets)
*exempt — do not count in determining eligibility
*nonexempt – single applicant ($2,000)
married applicant ($2,000 for “ill spouse” and “well
spouse” may retain $113,640)
(3) Monthly Income
II. WHAT ARE EXEMPT ASSETS?
No Limit On Value:
A. Principal Residence 1;
*must intend to return home.
B. Household Furniture and Furnishings;
C. Personal Effects & Jewelry - heirlooms, wedding and engagement rings.
D. Car (car must be used for transportation by or on behalf of the person who is applying for Medi-Cal.)
E. Term Life Insurance
F. Irrevocable Burial Contract for Services
G. Burial Plots, Vaults And Crypts – For Use by Any Member of the Family
H. Pension Funds And Annuities Under Limited Circumstances
1. Pension Plans — must take periodic distributions.
* exception for “at home” spouse
2. Annuities — must take periodic payments of interest and principal and payments must be scheduled to exhaust the balance of the annuity on or before the end of the annuitant’s life expectancy.
I. Musical Instruments
Limit On Value:
A. Whole Life Insurance – Policies with total face value of $1,500.00 or less on life of any individual applying for Medi-Cal, or his or her spouse.
B. Designated Burial Fund – $1,500 or less
III. WHAT ARE NON-EXEMPT ASSETS?
A single person may only have $2,000 in non-exempt assets. In 2012, a married couple may have $115,640 in non-exempt assets [$2,000 for “ill spouse” and $113,6402 for “well spouse”(Community Spouse Resource Allowance (CSRA)]. “Non-exempt assets” are all assets which do not fall under the “exempt” asset category, those include, but are not limited to, cash, stocks, bonds, mutual funds, a second car, a second residence or other real property, whole life insurance with a face value in excess of $1,500, and certain annuities.
IV. PATIENT’S INCOME
The income of a patient (person receiving Medi-Cal benefits) will be reviewed by Medi-Cal in order to determine his/her “share of cost” (how much the patient will pay for his/her care). If a patient has private health insurance premiums, that monthly cost will be deducted from the patient’s income before determining his/her share of cost. The patient is also permitted to keep $35.00 per month as a “personal needs allowance.”
Example:
Total Monthly Income $1,200.00
less Medi-gap insurance 115.00
less personal needs allowance 35.00
Patient’s Share of Cost. $1,050.00
A. What If Medi-cal Recipient Is Married?
1. The “well spouse” (patient’s spouse) can keep all income that comes in the well spouse's name.
2. If the “well spouse’s” monthly income is less than $2,841.003 per month [Minimum Monthly Maintenance Needs Allowance (MMMNA)], the well spouse may be able to keep as much of the patient spouse's income as he/she needs to earn $2,841.00 per month.
3. Under certain circumstance, if the “well spouse’s” monthly income is less than $2,841.00 per month, the well spouse may also be able to have & keep “non-exempt” in excess of $113,640 (Community Spouse Resource Allowance) and still obtain Medi-Cal Long Term Care Benefits for his/her ill spouse. This option allows the couple to avoid “spending down” their assets in order to obtain Medi-Cal benefits.
V. GIFTING ASSETS TO SPOUSE OR FAMILY MEMBERS
A. There is no penalty for gifting or transferring exempt or non-exempt assets between spouses.
B. Period of ineligibility arises when patient gifts non-exempt assets to someone other than a spouse.
C. Regulations may be amended in the near future whereby a parent cannot transfer his/her residence (an exempt asset) to his/her child(ren) without incurring a period of ineligibility for Medi-Cal benefits, unless the child is a minor, disabled adult or blind adult.
Always obtain legal advice from an attorney experienced in Medi-Cal Planning before making any gifts or transfers, so you can make an informed decision that does not adversely affect your future Medi-Cal eligibility.
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Footnotes
1 As of the writing of this article, there is no limit on the value of a primary residence; however, it is possible that in the future the regulations will change and a house must have a net value of less than $500,000 or $750,000 to be an exempt asset.
2 The amount of the CSRA changes every year. $113,640 is the amount for 2012.
3 The amount of the MMMNA changes every year. $2,841.00 is the amount for 2012.