Dear Len & Rosie,
My mother who is 94. I was caring for her at home until she got too frail and was moved to a residential care home. Everything was going great until she fell and broke her hip, was sent to the hospital and things just went downhill from there. She was discharged to a skilled nursing facility for recovery but it hasn’t gone well.
I just found out that her Medicare payments will stop because she’s not making progress. The care home can’t take her back because she requires too much care. The private pay cost for the nursing home almost $10,000 a month! My mom has retirement income of $2,900 a month, some savings, an IRA and the house that I’m living in which is in a revocable living trust. Do we need to spend everything before Medi-Cal will step in to help? And what’s going to happen to the house? I’ve heard the State will put a claim on it. Is it protected because it’s in a trust? I’ve heard there’s a five year “lookback” and unless she planned ahead there’s nothing that we can do now.
Your situation is very typical. Medicare pays for up to 100 days of nursing home care, but only if your mother needs rehabilitation or skilled nursing care and shows continual improvement. It’s not unusual for someone as old and frail as your mother to find it hard to recover from such a traumatic event.
You won’t have to completely deplete your mother’s assets before she can get Medi-Cal assistance. The IRA and any other retirement accounts are exempt as long as your mother is taking her minimum required distribution. As far as the savings goes, there are strategies available to save some or most of it, such as conversion (putting money into things Medi-Cal doesn’t count) and gifting, which is allowable and won’t cause ineligibility if done correctly.
You’re completely right to be concerned about her house. It will be exempt for qualification purposes as long as you state she has an intention to return to it. You don’t have to prove that she’ll actually be able to return. You just need to check a box on the Medi-Cal application to satisfy this requirement.
However, the State of California will make a claim against your mother’s home after her death if you’ve done nothing to shelter it. Fortunately that’s a lot easier than it used to be. Since January 1, 2017, all your mother will need to do to shelter her home is get it out of her probate estate, ideally by creating an ordinary revocable trust. Alternatively, she can create a more specialized irrevocable trust if the plan is to rent out the home or sell it, as such a trust would prevent the rental income or the proceeds of the sale of the home from affecting her Medi-Cal eligibility.
The bottom line is that while you should review your situation with an attorney who does Medi-Cal work, it looks like you’re in pretty good shape and won’t have to do much to qualify your mother for benefits.
Dear Len & Rosie,