When you are getting serious about preparing for the latter portion of your life, you should certainly take long-term care expenses into account. Most elders will eventually need help with their day-to-day needs, and long-term care is very expensive.
Medicare does not pay for living assistance, but Medi-Cal will pay for nursing home care. Because of this dynamic, many people who were never financially needy ultimately seek Medi-Cal eligibility through a process called a Medi-Cal spend down.
You could literally spend assets to remove them from your own name as you aim toward future Medi-Cal eligibility, but many people will give gifts to their loved ones. These gifts could be looked at as inheritances given in advance.
There is a 30 month look-back to take into consideration if you are planning ahead with future Medi-Cal eligibility in mind. Any gift giving that you engage in must be completed at least 30 months before you submit your application if you want to become eligible in a timely fashion.
The Healthy or Community Spouse
Since Medi-Cal is a need-based program, the upper asset limit for an individual is just $2000. However, some things are not considered to be countable.
Your home is not a countable asset, and you can retain ownership of your vehicle, your personal belongings, and your household goods. Wedding and engagement rings and heirloom jewelry are not countable, and you can have unlimited term life insurance.
There is a $1500 limit on whole life insurance, which is life insurance that has a cash value.
If you are applying for Medi-Cal coverage while your spouse is still capable of independent living, your spouse can retain ownership of half of the shared countable assets up to a certain prescribed limit. In California in 2015, this limit is $119,220, and it is also the minimum. Because of the minimum allowance, even if $119,220 is more than half of the shared countable assets, the community spouse would be able to retain ownership of this amount.
The Medi-Cal program would require you to contribute most of your income to defray the cost of your care if you are single. However, if you are married and your spouse is relying on some or all of this income for support, the above requirement would be waived.
There is a Medicaid Monthly Maintenance Needs Allowance that would allow the healthy spouse to continue to receive income that is brought in by the institutionalized spouse. The amount of this allowance is $2,981 in 2015.
Medi-Cal Planning Report
You should certainly think long and hard about potential long-term care costs when you are budgeting for the future. Medi-Cal can help you keep a significant store of assets in the family if you plan ahead effectively.
We have prepared a free special report on Medi-Cal planning. If you would like to learn more about the program and how it can help you preserve resources for the benefit of your loved ones, visit this page to access your copy: Los Angeles CA Medi-Cal Planning.
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