Questions & Answers for California residents needing to reduce the cost of nursing convalescent care expense.
Q: How does a person qualify to receive Medi-Cal funds for nursing, convalescent or skilled nursing facility expense?
A: To determine eligibility, the ill person must meet an asset test. Assets fall into different categories and here is a secret to planning. Assets in the exempt or not countable category are not counted against the ill person. Only the "countable" assets are used.
There is no income test for qualifying in California! Income of the ill person is related to how much is paid to the nursing home (share-of-cost), but having high income will not prevent you from qualifying and saving possibly hundreds or even thousands of dollars with proper advice and planning.
While Congress has already set up a legal plan to protect your savings, it is complex enough to require professional assistance once you understand the basics. But it is like not knowing about an income tax deduction, if you don't know the rules, then you pay too much, don't you?
Congress has devised procedures to convert non-exempt assets into legally recognized alternative assets that Congress approves. It is not your plan, but their plan. We have followed these rules for clients for many years and saved many families from financial disaster.
Q: How can I qualify for Medi-Cal and still have money, income or assets worth anything?
A: For an individual applicant, their assets over $2,000 are preserved by making the excess over $2,000 "exempt." In addition, for spouses, the well spouse can also arbitrarily exempt $87,000 automatically or perhaps $300,000-$400,000 with court approval of any assets and then make unavailable the remainder, of any amount, by using legally approved methods.
Q: Do you tell Medi-Cal the truth about exempting your assets?
A: Yes, always. Remember you re following the law not abusing it. You win by following their rules. Just like using legal deductions on your income tax return, when you don't know how to use a deduction, for example the interest on you own home, then you lose that deduction by ignorance. But, when you use a deduction properly, you get the benefit. Just to illustrate this point, the IRS cannot disallow an interest deduction on you home even if you bought your home just to get interest deduction. No one can prevent you from qualifying for Medi-Cal if you follow the law.
Q: Why don't I just give everything away to meet the asset test?
A: You could end up both poor and not qualifying for Medi-Cal with this idea! Medi-Cal adds back the value of the gifts for at least 30 months (although 36 months is a better rule of thumb for technical reasons too complex to discuss) as though you still had the assets. If you cannot recover the gifts back, well, you figure it out?;no money and no federal funds, how do you pay for care?
Q: I have heard the figure $2,000, is that correct?
A: Forget about poverty, the law is clear: if you cannot afford to pay the statewide average of $4000 per month for convalescent care, you can qualify without regard to the dollar value of your estate!
You could have substantial funds and qualify for Medi-Cal. You could have a substantial monthly income and remain on Medi-Cal, but not without proper planning. When we say substantial, however, remember that some people can afford to pay $3,000 to $6,000 per month for their own care and would not be applying for Medi-Cal. But, is that you or your family? If not, you need to plan. Everyone over age 50 needs a professionally prepared plan for Catastrophic Care.
IS IT TIME TO LEARN YOUR LEGAL RIGHTS IN CALIFORNIA?
Please email or call (916)489-8900 and ask for Dennis W. Kroeker, Attorney.
