WHAT ABOUT MEDICAL?
In California, nursing homes are considered health care facilities and as such are licensed and scrutinized by the California Department of Health Services. As medical facilities they are allowed to provide services that cannot be dispensed in assisted living or board and care homes. Typically these services involve managing complex and potentially serious medical problems such as infections, wound care, IV therapy, and coma care. They offer both short and long term care options for those with serious problems and disabilities such quadriplegics, MS patients, ALS patients and others who are bedridden and are unable to do anything on their own.
Nursing homes also provide a host of rehabilitation services that are typically utilized on a short-term basis after a hospitalization for injury or illness. Patients can receive almost any kind of rehabilitative therapy in nursing homes these days, most of which will be covered, in whole or part, by Medicare or Medicare HMO’s, with the requirement that there is hospitalization for 3 days prior to a discharge to a nursing home. However, the implementation of the Prospective Payment System limits payments to nursing homes and allows them to choose who they admit.
So who needs a nursing home? Only those individuals that have serious disabilities to the extent that the services that they need cannot be found through residential care (aka board and care) or home care. Unfortunately, economics rather than the availability of services often dictate the choice. It works like this; if you’re on a limited budget and cannot afford $4,000 to $7,000 a month for 24 hour home care or $2,500 to $5000 for residential care you may have to be placed in a nursing home with the cost paid for by the state under the Medi-Cal long term care program (California’s Medicaid program for those with no financial resources of their own).
As a footnote it should be mentioned that facilities limit the number of beds allocated to Medi-Cal patients and they are always shared rooms meaning more than one person to a room, commonly as many as three to four to a room in addition patients will have various medical needs and conditions.
WHAT IS MEDI-CAL?
Medi-Cal is the State of California’s version of the federal Medicaid program that provides additional health
insurance for qualified individuals who are at least 65 years of age, blind or disabled. Medi-Cal is
particularly helpful to individuals that reside in skilled nursing facilities that have exhausted their Medicare
skilled nursing home coverage. While Medicare often covers the first 20 days of skilled nursing home
expenses, coverage for days 21 through 100 requires a co-payment of $137.50 per day and is only available
if the patient continues to show improvement in his or her condition. The co-payment of $137.50 per day
may or may not be covered by the patients’ secondary health insurance, depending upon their individual
plan. Upon receiving a maximum of 100 days of Medicare coverage, the patient is then typically converted
to “private pay” status where monthly expenses average approximately $6,300 per month. On the other
hand, Medi-Cal will continue to pay for skilled nursing home expenses indefinitely, regardless of whether or
not the patient continues to show improvement.
STANDARD ELIGIBILITY LIMITS FOR LONG TERM CARE MEDI-CAL BENEFITS
The applicant must be 65 years of age, blind or disabled in order to receive Medi-Cal Long Term Care
benefits. A single applicant may not have more than $2,000.00 (for 2010) in “non-exempt” assets, while a
married applicant is allowed $109,560.00 (for 2010) in “non-exempt” assets.
Medi-Cal classifies certain assets as “exempt” and their values are not used in the determining an
applicant’s eligibility. The following are the major assets considered “exempt” by Medi-Cal in determining
• Principal Residence • Certain Life Insurance
• One Vehicle • Household Goods
• Most Qualified Retirement Accounts • Burial Plots
It is important to understand that the above are “standard” Medi-Cal eligibility limits. For married applicants,
it is possible to significantly increase the “standard” $109,560.00 limit through a “3100 Court Petition” or
“Administrative Fair Hearing.”
Again, a Medi-Cal eligibility plan should only be carried out under the guidance of a knowledgeable California
elder law attorney familiar with the complex Medi-Cal regulations.
“SHARE OF COST”
Although an applicant’s income is not an eligibility factor, Medi-Cal does review an applicant’s income to
determine the applicant’s monthly co-payment (“share of cost”). The formula used to determine an
applicant’s “share of cost” has many variables and often allows the applicant’s spouse to retain a large
portion of the applicant’s income. With proper planning it may be possible to reduce one’s “share of cost.”
MEDI-CAL ESTATE RECOVERY
Medi-Cal keeps track of the total amount of benefits it pays out over the lifetime of a Medi-Cal beneficiary
and attempts to recover that amount from the beneficiary’s remaining estate. Medi-Cal may only recover
from the assets that the Medi-Cal beneficiary has an ownership interest in at the time of their passing, and
only after the Medi-Cal beneficiary’s spouse also passes away. Thus, the Medi-Cal beneficiary’s spouse will
have unrestricted use of the assets for the remainder of their life.
COURT PROCEEDINGS AND ADMINISTRATIVE FAIR HEARINGS TO QUALIFY
FOR MEDI-CAL BENEFITS
For married couples, a “3100 Court Petition” or “Administrative Fair Hearing” are often valuable tools used
to significantly increase the standard $109,560.00 Medi-Cal eligibility limit. Additionally, a “3100 Court
Petition” may be used to reduce or possibly eliminate the “share of cost” co-payment and to transfer all
assets to the Medi-Cal beneficiary’s spouse thereby eliminating potential Medi-Cal recovery.
A WORD OF CAUTION
Medi-Cal regulations are constantly updated and changed. Medi-Cal planning should only be done under the
supervision of an elder law attorney familiar with Medi-Cal. Certain transfers of property can have
significant tax ramifications that should be discussed with your attorney. Furthermore, improper transfers
can disqualify a Medi-Cal beneficiary and result in a significant period of ineligibility for Medi-Cal benefits.
*This information is designed to provide a general overview with regard to the subject matter. It is not intended, nor should it be interpreted as legal advice.
You should consult an attorney for individual advice regarding your particular situation.