Medi-Cal benefits are extremely beneficial if there is a need for nursing home care over and above Medicare coverage. Medi-Cal will cover the cost of custodial nursing home care minus a “share of cost” which is based on income. Medi-Cal allows for your long term care costs to be capped at the amount of monthly income so that assets don’t have to be depleted on nursing home care and can be saved aside and used to pay for residential care instead.
CURRENT MEDI-CAL ELIGIBILITY RULES
To qualify for Medi-Cal, the applicant must demonstrate that they have limited resources available. California law allows the applicant to have up to $2,000 in countable assets.
Available Non-Exempt Resources:
Simply put, available resources are the things that you own that could be cashed in to pay for your medical bills. Here is a list of the things that Medi-Cal will count:
• Cash accounts: checking accounts, savings accounts, money market funds, certificates of deposit and any other type of bank account that you may have. This also includes cash on
hand, uncashed checks and anything you might have in your safe deposit box that you could cash in to pay for care.
• Stocks, bonds and other investments: this would include brokerage accounts, mutual funds, stock certificates, bond funds, deferred annuities, cash value of whole life insurance and savings bonds.
• Boats, mobile homes, trailers and that extra car or truck: Medi-Cal allows you to hold one car as exempt, so if you have more than one vehicle, the value of the extra vehicle or vehicles will be counted. If you own a boat or mobile home that you aren’t living in as your principal residence that will also be counted.
Here is a list of the things that Medi-Cal doesn’t count:
• Principal residence: the property that you use as a home or intend to use as a home is exempt and not counted in determining eligibility. If you are not living in the home as long as you have a subjective intention to return to it (you’d live there if you were completely well) then it’s not counted even if you are renting it out to someone else. A boat or motor home can be counted as an exempt principal residence if you don’t own real property.
• Proceeds from the sale of your principal residence: If you’ve just sold your home, the proceeds from the sale are exempt for up to six months if you intend to purchase another home. The money remains exempt even if you use some of it for living expenses and other items besides purchasing a new home.
• Real property used in a business or trade: real estate used in a trade or business won’t be counted regardless of its value. In addition, up to $6,000 of the equity value of non-business property, mortgages, deeds of trust and other promissory notes may be exempt under certain circumstances.
• Personal property used in a trade or business and business accounts: this would include tools, vehicles, equipment and the cash accounts necessary to run your business. Medi-Cal doesn’t count any of this as long as cash on hand and money in checking accounts is necessary for the functioning of a business or a means of self-support.
• IRAs, Keogh plans, 403b, 401k, SEP IRAs, Roth IRAs and basically any other work-related pension or retirement fund can be made exempt. If you don’t want Medi-Cal to count the account, you just need to start minimum payments of interest and principal (based on IRS tables) and the balance of the account will be considered to be unavailable. This is true even if you are under the age that you’d normally have to take distributions.
• One motor vehicle: One car, truck, motorcycle or motor home of any value can be exempt and not counted. It doesn’t matter if you can’t drive or have never driven the vehicle. You’re allowed to own one and someone else could use it to drive you around if you don’t drive.
• Personal effects: this includes clothing, heirlooms and heirloom jewelry, wedding and engagement rings and other jewelry with a net value of under $100.
• Household items, recreational items, and musical instruments: Medi-Cal doesn’t require that you hold an estate sale to sell off your stuff to pay for care. So just about anything in your house including furniture, TVS, DVD players, computers, guns, pianos, guitars, drum sets etc.... are yours to keep.
• Burial related items: Your burial plots plus the plots for anyone in your immediate family are exempt. You’re also allowed to have an irrevocable burial trust of any value. This is a trust set up by a funeral home to take care of all of your burial expenses. In addition, you can have a revocable burial fund (as simple as an account set aside at the bank) of up to $1,500 plus accrued interest.
• Some life insurance policies: If your life insurance policy is term only (no present day cash value) then it’s not counted.