Elder law attorneys assist clients who are looking ahead toward their senior years. Health insurance is very important for all of us, but it is particularly important for senior citizens. Most seniors will qualify for Medicare, so we will look at that program first, and then we will explain the difference between Medicare and Medi-Cal.
Medicare
Medicare coverage is earned through the accumulation of retirement credits. You can earn up to four credits per year through your tax contributions, and you will qualify for coverage at the age of 65 if you accumulate at least 40 credits throughout your working career.
Medicare provides a great deal of coverage, but it does not cover everything in full. There are out-of-pocket expenses to contend with, and there is also the matter of long-term care.
Most senior citizens will eventually need help with their activities of daily living. This type of care is called custodial care. Medicare does not cover custodial care, and it is very expensive.
In California, a year in a nursing home will typically cost over $100,000, and people often spend multiple years in nursing homes toward the end of their lives.
Medi-Cal
Medicaid is a program that is offered around the country. It is jointly administered by the federal government along with each state government. California’s version of the program is called Medi-Cal.
This is a need-based health insurance program. Eligibility for coverage has nothing to do with the accumulation of retirement credits. You can become eligible for Medi-Cal if you can prove that you have very limited financial resources.
We focus on the elder law field, and in our field, Medi-Cal is relevant because it will pay for long-term care.
People who were never financially needy often aim toward Medi-Cal eligibility because they are positioning themselves to be able to absorb future long-term care costs. You could keep resources in the family by giving gifts to your loved ones before you apply for coverage.
This can be an effective strategy, but you must act well in advance, because there is a 30 month look back in California. You must complete your gift giving at least 30 months before you apply. If you do not, you will not be eligible at first.
Depending on the timing and the amount of the divestitures, you could potentially pass away in a nursing home before you obtain Medi-Cal eligibility if you give away assets within this look back period.
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