Medi-Cal is California's version of the federal government's Medicaid program. Each state administers Medicaid with some variations of the federal program.
In California, Medi-Cal pays for almost 60% of nursing home expenses. Even though it covers long term care expenses, Medi-Cal has strict requirements on how care is provided and where. It does not cover assisted living services and very few home and community services. Medi-Cal will only pay for services in a Medi-Cal approved nursing home.
This is blog will focus solely on Medi-Cal long term care eligibility.
Qualification for Medi-Cal depends on a person's income and assets [personal or real property]. California looks at countable /nonexempt assets and unavailable/exempt assets. There are limits on the value of countable assets someone can own to be eligible for Medi-Cal long-term care benefits.
Exempt Assets
Exempt assets are not used to determine a person's eligibility for Medi-Cal. Some examples of exempt assets are:
Primary Residence —if a person does not live in their home because they live in a nursing home; the home is exempt if the person intends to return to it. In addition, the home stays exempt if a person's spouse or dependent family member lives in it;
a maximum of $6,000 of income producing real property;
real property that is used in a business;
a motor vehicle;
personal property and household items;
jewelry - wedding and engagement rings; in addition to other jewelry worth $100 or less;
term life insurance;
burial plots and prepaid burial plans;
IRAs and work retirement plans, e.g. 401(k), 403.
Home Equity Limits
If a person's home equity interest is more than $802,000 they would not be eligible for Medi-Cal.
Exemptions to this rule are:
The person's disabled or blind spouse or minor child that is under age 21 lives in the house;
The California Department of Health Care Services determines that not giving the person the benefits would create a hardship.
Medi-Cal Asset Limits
Medi-Cal allows a person to retain up to $2,000 in assets. For couples, the amount is $3,000 if they both need care.
Rules for Married Couples
If only one spouse needs care, then the Medi-Cal eligibility rules would allow the spouse that does not need care to maintain some of the couple's shared community and separate property. This is called the community spouse resource allowance (CSRA). In 2014, this amount was $117,240. Please note this amount does not include the home and other exempt assets.
The federal Spousal Impoverishment Act, establish the CSRA with the goal of enabling the spouse who does not need care to avoid impoverishment without terminating the Medi-Cal eligibility of the spouse that does need care.
Spend Down
If a person's countable assets are over the exempt amounts, to be eligible for Medi-Cal they have to spend down their assets at or below the state poverty level or to $2,000.
You cannot spend down by giving away your assets. If you do, you will be ineligible for Medi-Cal for a period of time after the asset was transferred.
The Medi-Cal application will ask if the applicant gave away assets within the 30-
month period before the date of application (referred to as the look-back period). If yes, then the applicant is ineligible for benefits.
Though the Federal Deficit Reduction Act of 2005 extended the Medicaid look-back period to 60 months, California has kept it to 30 months.
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