Medi-Cal is the California state version of what is called Medic-Aid in other states. It is funded primarily by the federal government, but is administered by the State. Medi-Cal pays for the medical care of those who have little income or assets. In particular, it will pay for long term care in a skilled nursing facility (but generally not for assisted living care or a board and care home). Medicare will only pay for part nursing care costs for the first 100 days, and only then if the individual was transferred directly from an acute care hospital. And unlike Medicare, Medi-Cal has no minimum age limit.

The "non-exempt" assets of the ill individual (the "applicant") must be under $2,000 in order to qualify for Medi-Cal benefits. What is exempt then is the key.

May I Give Away Assets? by Kevin Staker

Gifting is an area in long term care planning that is presently very advantageous. However, it is extremely easy to make mistakes that result in long periods of Medi-Cal ineligibility, and so the advice of a competent attorney should be sought before any gifting is done. But with proper gifting, an applicant with significant assets may be able to qualify for Medi-Cal benefits.

As mentioned above, the non-exempt assets of a spouse cannot exceed the CSRA. Reducing such assets to that limit one of the keys to planning for a married couple, and is an integral part of how we can assist you.

Another issue is whether the income of the spouse in the nursing home will go to the well spouse or must instead be used to pay the nursing home costs. The Minimum Monthly Maintenance Needs Allowance ("MMMNA") is an amount of income the government determines is adequate for the maintenance of the well spouse. The MMMNA is presently $2,610 (in 2008). If the income of the well spouse exceeds this amount, any excess must be used to pay for the nursing home costs. However, it is possible to have the CSRA and MMMNA raised on an individual basis, by petitioning the Court, but you will need legal representation to accomplish this.

It is also necessary to have legal assistance to deal with situations where the well spouse acquires significant assets, such as through an inheritance, after the ill spouse qualifies for Medi-Cal. It is important that such assets do not cause a subsequent period of ineligibility for Medi-Cal benefits.

It is a common misconception that if an individual receives Medi-Cal benefits, the government will "take your home" or "put a lien on your home." However, Medi-Cal can recover their expenses after the death of the Medi-Cal recipient, or the death of their spouse, if married. We can assist our clients in possibly preventing such recovery by Medi-Cal, and preserving those assets instead for their family. It is vital that such planning be initiated as early as possible before the death of the applicant or spouse, ideally at the time one applies for Medi-Cal benefits.

The Deficit Reduction Act (the "DRA") was signed by President Bush in February of 2006. The DRA makes major changes to the rules governing Medi-Cal, making it much more difficult to qualify for benefits.

However, California has yet to implement the DRA. More than two years have passed since the DRA was signed, and California has yet to implement most of the new provisions. But now, California is finally showing signs of moving forward. It is likely that California will not implement all of the DRA provisions until late 2009 or early 2010, at the earliest. However, careful planning must be done ahead of time, and one should consider what can and should be done now before these new regulations take effect.

The time is now to consider whether or not to take action to qualify for Medi-Cal to pay for long term care in a nursing home. The window of time to taking action is becoming shorter and shorter.

To learn more about planning for long term care under Medi-Cal, please do not hesitate to contact us at (805) 482-2282, or e-mail us at KGS@Staker.com

By Kevin Staker