Medicaid and Medi-Cal Planning
An Orange County Wills and Trusts Lawyer website has an interesting article about Medicaid Planning. The Medic-Cal Program is a joint venture between California and the Federal Government of the United States, of which Cal-Optima is part of.
Medi-Cal is by all measures a huge program. California has one of the largest populations of any state, and more than many countries, and one in four California residents are part of the Medi-Cal program. Under the Covered Care California health insurance problem, part of the Obamacare mandate, the program has swelled from 8 million in 2013 to just over 10 million currently (2016). The great success of the Medi-Cal program has been its best strength, and also its greatest weakness.
Medi-Cal is most often used for the high cost of Nursing or Retirement home care in California. However, the guidelines state that it is only available for the truly indigent, defined under the California guidelines as those with 2000 in assets or less. There are some exceptions to this net worth requirement, including that the 2,000 doesn’t include a primary residence, one car, or any wedding, engagement, or heirloom jewelry.
Still, most people plan to give away assets or spend money on their family until they reach this amount, to qualify for benefits. The problem with that is, that under Federal Law (Medicaid) any transfers or spending within 60 months, or five years, is voidable, and doesn’t count. Under California Law (Medi-Cal), any spending down or transfer or sale of assets are voidable or make one ineligible for thirty months. That means that upon applying for benefits, Medi-Cal looks back 30 months to see if any transactions would make one ineligible for benefits.
Creative use of trusts, however, can make one eligible right away. Even better, proper planning ahead of time can avoid a problem where a family member needs care, but doesn’t qualify for Medi-Cal, or can give enough time to get retirement home or nursing care insurance, which can cover this expense. California has one of the most expensive nursing home care expenses in all fifty states – at an average of nearly $100,000 per year.
Contact the Orange County Estate Planning Attorneys at Miller & Associates in Newport Beach for any questions for a Medi-Cal planning Lawyer, or to help set up a trust to avoid denial or fraudulent transfer claims.