Planning ahead for retirement and the eventualities of aging involves gaining an understanding of government programs that are in place to assist senior citizens. An elder law attorney can provide you with the information that you need to go forward in a fully informed manner.
Health care is obviously very important to elder Americans. Medi-Cal and Medicare are the government health insurance programs that are relevant to many seniors here in the greater Los Angeles area, and a lot of people don’t understand the implications.
In this post, we will examine these programs, highlight the differences between them, and draw some conclusions.
Medicare
Under currently existing laws, you become eligible for the Medicare program when you reach the age of 65 if you have earned enough retirement credits. These credits are earned as you pay taxes on your income throughout your life.
You must accumulate at least 40 credits to qualify for Medicare health insurance coverage. It is possible to accrue as many as four retirement credits per year. In 2016, the minimum amount of money that you must earn to be awarded the four credits is $5040.
Medicare is going to pay for a significant percentage of health care costs if and when you qualify for the program. However, you should understand the fact that there are out-of-pocket costs.
Medicare Part A is the portion of the program that pays for inpatient hospital stays. There is a deductible, and there are co-payments. Medicare Part B is the portion of the program that pays for outpatient care and visits to doctors.
You have to pay a monthly premium to obtain Medicare Part B coverage. The amount of the premium will vary based on your income. The less you make, the lower the premium will be, but there is a minimum monthly premium of approximately $105 per month.
Medi-Cal
Medi-Cal is a program that is not exclusively applicable to senior citizens. People of all ages can and do qualify for Medi-Cal health insurance coverage.
Medi-Cal is a need-based program. As such, to qualify, your countable assets cannot exceed $2000 in value. The word “countable” is quite relevant here, because some of your valuables don’t count when your eligibility is being determined.
Your home is not considered to be a countable asset, and your wedding ring and engagement rings would not count. Personal effects and the items that you have around the house would not be counted either.
Long-Term Care
Medi-Cal is relevant even if you are going to be eligible for Medicare, because Medicare will not pay for a long-term stay in an assisted living facility. Medi-Cal will help with these expenses if you are able to qualify for the program.
Long-term-care costs can be staggering. In Southern California, you are looking at a figure that is in excess of $100,000 for a single year in a nursing home. It is not uncommon for seniors to spend multiple years in nursing homes at the end of their lives.
Qualifying for Medi-Cal to Pay for Long-Term Care
As previously mentioned, the upper asset limit for Medi-Cal eligibility is $2000, but some of your property does not count toward this figure.
One strategy that is often utilized to obtain Medi-Cal eligibility is that of the “spend down.” It is essentially self-explanatory: You spend down your money until you have less than $2000 in countable assets in your possession.
The thing is, you can’t find out that you need long-term care on Tuesday, give away all of your assets on Wednesday, and enter the facility on Thursday with Medi-Cal paying much of the bill. There is a penalty imposed if you give away assets within a certain amount of time prior to applying for Medi-Cal coverage. This interim is called a look-back period.
Medi-Cal is California’s version of Medicaid. It is a program that is jointly administered by each state along with the federal government. The respective states have a bit of leeway with regard to exactly how the program is administered in that individual state.
The California look-back period has been 30 months, but for the most part across the country it is five years. California is supposed to follow suit at some point in time and adopt the five-year look-back period.
Consult With an Elder Law Attorney
Let’s recap the important highlights. If you have accumulated enough retirement credits, you become eligible for Medicare at the age of 65. When it comes to Medicare eligibility, there is no ceiling on the amount of financial assets that you can have in your possession.
Medi-Cal is a need-based program. The upper asset limit is $2000, but certain possessions don’t count. There are no particular age requirements.
Medicare will not pay for long-term care. Medi-Cal will assist with these expenses.
Because of the above, many seniors who are eligible for Medicare ultimately seek Medi-Cal eligibility.
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