The cost of providing nursing home care has increased dramatically in recent years.   One method for satisfying the high cost of nursing home care is for the nursing home applicant to become eligible for Medi-Cal. Medi-Cal will pay for an indefinite period of custodial nursing home care in a Medi-Cal certified facility, as long as the applicant is financially eligible for Medi-Cal.  This page will give an overview of (1) the financial restrictions affecting Medi-Cal eligibility and (2) strategies for obtaining or accelerating Medi-Cal eligibility.

1.    Financial Restrictions Affecting Medi-Cal Eligibility

The financial restrictions affecting Medi-Cal eligibility for nursing home care target an applicant's (a) assets, (b) income, and (c) prior asset transfers.

a.    Asset Restrictions

To qualify for Medi-Cal nursing home benefits, an unmarried applicant cannot have more than $2,000 in countable assets. If the applicant is married, the amount of assets that can be owned by an applicant's spouse is limited by a complex formula.  However, Medi-Cal considers certain assets to be exempt from the countable asset requirement.  The most significant exempt asset is the applicant's principal residence.  Other exempt assets include a car, household furnishings and personal effects, and certain family-owned businesses.

b. Income Limitations

There is no specific limit on the amount of income a person may receive and still qualify for Medi-Cal. However, for unmarried applicants in particular, it is often difficult to receive Medi-Cal benefits unless the applicant spends almost all of his or her monthly income on medical expenses.

c. Transfer of Asset Restrictions

Over the years, the Medi-Cal program has developed a complex set of transfer rules to discourage persons from giving their assets away to gain eligibility for Medi-Cal.   An applicant for Medi-Cal will incur a penalty period of ineligibility if the applicant (or the applicant's spouse) has transferred assets for less than fair market value within 30 months of his or her application for Medi-Cal benefits (or 60 months in the case of a transfers through certain trusts).  There are certain limited exceptions to these transfer-of-asset rules.

2.    Strategies for Obtaining or Accelerating Medi-Cal Eligibility

An attorney experienced in Medi-Cal planning can advise you on some of the techniques for obtaining or accelerating Medi-Cal eligibility.  Such strategies can include the following: (a) "spending down" one's assets; (b) converting non-exempt assets to exempt assets such as a principal residence; and (c) transferring assets by gift.  In particular, transfers of assets by gift require careful planning to minimize the adverse effects of the transfer-of-asset restrictions, and to determine the optimum value of the assets to be transferred.

After a Medi-Cal recipient's death, the state may make a claim or file a lien against any exempt property (such as a principal residence) owned by a Medi-Cal recipient for benefits that the state has paid on the recipient's behalf.  Minimizing the effect of such claims and liens requires careful planning.

Send mail to rchampoux@a-1law.com with questions or comments about this web site.
Copyright © 2008 Ronald E. Champoux, Esq.

The purpose of this web site is to provide general information on estate planning, family law and probate.  The laws on these topics are subject to change.   Nothing in this web site should be construed as legal advice.  If you have a specific legal problem, you should consult a lawyer.