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Medi-Cal Planning

What is Medi-Cal?


Medi-Cal, around the country known as Medicaid, is program that helps individuals with their health care costs.  Of particular interest to seniors and their families is that Medi-Cal can help pay for most or all of a person's long-term care in a skilled nursing facility or nursing home.

What are the requirements to receive Medi-Cal?

In 2020, the requirements to receive Medi-Cal for long-term care in a skilled nursing facility are as follows:

          Single Individual

          $2,000 in Countable Assets

          Can have a Primary Residence

          No income limit        

          Married Couple

          $128,640 in Countable Assets

          Can have a Primary Residence

          Well spouse can keep up to $3,216 of monthly income

Please keep in mind that these are very general guidelines and each requirement has exceptions.  

What if I have too much money to qualify?

The average private pay rate (APPR) per month for care in a skilled nursing facility is $9,337 per month in the state of California.  When someone is faced with long-term care in a skilled nursing facility, many Californians cannot afford to pay this much, however frequently have too many assets.  There are several planning opportunities to help qualify for Medi-Cal.  Some planning opportunities include gifting, spending money on your home, purchasing exempt assets, and establishing certain types of Irrevocable Trusts.

Can I gift my assets away and qualify for Medi-Cal?

The simple answer is no.  Medi-Cal has strict requirements when it comes to gifting assets and establishing Irrevocable Trusts.  You should seek the advice of an Elder Law Attorney such as California Estate Planning Services and we will guide you on the best way to qualify for Medi-Cal for long-term care in a skilled nursing facility.

What are Exempt Assets?

An Exempt Asset is an asset you are allowed to keep in your name while still qualifying for Medi-Cal.  Exempt assets include your primary residence, household goods and your personal effects, some jewelry, one vehicle, term life insurance, a burial plot, and an Individual Retirement Account (IRA) if you are taking your Required Minimum Distributions (RMDs).  

What are Countable Assets?

A Countable Asset is an asset that Medi-Cal counts towards your resources to determine if you qualify.  Countable assets include real property other than your primary residence, second vehicles, money in checking accounts, savings accounts, CDs, and investment accounts, and certain life insurance policies.

What if I want to sell my Primary Residence?

While the primary residence is an exempt asset, the sale proceeds are not.  Planning must be done prior to selling your primary residence.  Do not simply give your house away before selling it as there could be severe tax consequences.  One common strategy that we implement is the establishment of an Irrevocable Trust to own your primary residence and to allow the sale proceeds to remain exempt.  

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