Long-term care planning often presents a lot of financial difficulty to families. In fact, estimates from the National Institute of Health state that over 40% of persons who live to the age of 70 will spend at least some amount of time in a nursing home before they die.
These numbers often represent an extraordinary financial burden on middle-class families. Long-term care is costly: the average price of assisted living in 2020 is a whopping $4,300 a month. The only federal assistance program that pays for long-term care is Medicaid, which requires recipients to have a very low-income lifestyle. Medicare does not cover long-term care facilities with the exception of short stays in specific nursing facilities directly after illness or injury.
The state of California offers the only state program that covers the cost of long-term care in skilled facilities: Medi-Cal. If you are in a position to take advantage of what Medi-Cal offers, understanding the process is paramount.
How do I qualify?
As the rules governing Medi-Cal change every year, it is important to stay stay up-to-date with the latest developments. The good news is that just because you possess savings or assets does not mean that Medi-Cal will automatically exclude you. However, it does mean that the qualification process will be different for each individual or couple depending on their specific financial situation and assets.
Is anything exempt?
When we go through the process of managing your assets for the purpose of Medi-Cal qualifications, we will organize them into two distinct groups: “exempt” and “non-exempt.” Anything we can categorize as “exempt” is not counted against you when we determine your eligibility for Medi-Cal.
For instance, a single applicant for Medi-Cal may have up to $2000 in liquid assets at a time. This includes checking, savings, and any excess cash surrender value of life insurance policies.
There is also the vital delineation between “real” and “personal” property. For instance, the government will exclude your principal residence and any property used in a business or trade as “real” property. “Personal” property that the government will exclude includes one motor vehicle, personal effects, livestock, musical instruments, life insurance policies, burial plots and more.
What if my spouse does not need Medi-Cal?
The government has put legal provisions in place in the event that one spouse needs long-term care while the other spouse does not. Typically, the government deems the spouse that does not need long-term care the “community spouse”. As such, Medi-Cal does have the Community Spouse Resource Allowance (CSRA) that allows the community spouse to retain over $120,000 in liquid assets, even if the “institutionalized” spouse is applying for long-term care through Medi-Cal. Keep in mind that the term “institutionalized” is a bit misleading: even if the spouse needing care plans on staying in his/her home with an in-home care aide, he/she is still the “institutionalized” spouse.
How do I get help?
Navigating the laws that govern Medi-Cal is complex, and the rules and regulations change frequently. We advise working with experts on the matter to ensure that you are in the best position to finance long-term care. Contact us at AmeriEstate today to learn more about how we can help you live your golden years safely and affordably.