What is Medi-Cal planning program?
It’s a program in the state of California that helps pay for long-term care and other medical care needs. With Medi-Cal, in Covina and Temple City, you may only qualify for Medi-Cal long-term care benefits if you have limited assets, such as cash. For Medi-Cal planning and computation, you may exclude assets like a house, car, personal items like jewelry, and more. Medi-Cal benefits are useful if you need help with extra care in the home or in a skilled nursing facility, as Medicare often doesn’t cover the cost of long-term care.
Long-term care is one of the most important components of the Medi-Cal program in California. If you or a loved one cannot perform two activities of daily living—such as eating, bathing, grooming, transferring, toileting—then you may qualify to have Medi-Cal pay for your long-term care.
Qualifications for Medi-Cal
In order to qualify for Medi-Cal, you must meet the following eligibility requirements:
There must be a determination by a doctor that you cannot perform 2 out of 5 activities of daily living.
- Countable assets must be transferred outside of your name.
- However, if you are married, there will be spousal allowances given to the spouse who is not trying to qualify for Medi-Cal.
Exclusions for Medi-Cal
Currently, these assets are not countable in California:
- Personal effects
- One automobile
- Term Insurance
- Whole Life Insurance with under $1500 cash value
- Prepaid burial
- Property used in trade or business
- Special payments protected by law
- Work-related plans (IRAs, 401Ks, etc.)
- Certain Annuities
There are different eligibility requirements for single persons and married couples.
California has a 30-month look-back period, which means that gifts over a certain monetary amount made within 30 months may cause Medi-cal ineligibility.
As you can see, qualifying for Medi-Cal is typically not the simplest process.
In order to properly navigate these eligibility requirements, attorneys often draft a certain type of irrevocable trust called a Medi-Cal Asset Protection Trust. This Trust allows the client to protect his or her assets by moving those assets into the Trust, and still qualify for Medi-Cal.
Effective January 1, 2017, Medi-Cal can now only recover after the recipient passes away if there are assets that are subject to probate. This means that if a person moves his or her assets into a Trust, and receives Medi-Cal benefits, Medi-Cal will not be able to recover the person’s assets after death, allowing him or her to leave a legacy for your loved ones.
Due to the recent change in California, Medi-Cal planning has become a much more attractive option for many of our clients. If you live in Covina, Temple City or surrounding areas, please contact our Medi-Cal attorneys at (626) 858-9378 or request a consultation.
Further reading on Medi-Cal