What Is The Most I Can Have In My Account To Qualify For Medi-Cal?
The limit on a bank account, since it is a non-exempt asset, would be $2,000 to qualify for Medi-Cal. Any one day during a month that the person is qualified for Medi-Cal, the account must be $2,000 or less. You can have an account of $2,000 on the first day of the month and receive income into the account that will make it more than $2,000. As long as the income is spent before sometime the next month to reduce the account back down to $2,000 for at least one day the next month, then it will not disqualify you. The account can fluctuate but at least one day of every month, it must be $2,000 or less.
What Is A Spend Down?
To spend down the asset is to reduce your non-exempt assets to that $2,000 level so that the person may qualify. This is done in a couple of ways. One way is to spend those excess non-exempt assets to improve an exempt asset. For instance, if the person has deferred maintenance or repairs on their home, the non-exempt assets, the cash, can be used to repair or improve the home and then that money becomes part of the home and it is exempt. It can also be used to purchase another kind of an exempt investment. For instance, if possible, to be contributed to a retirement plan account or used for prepayment of burial expenses. Lastly, it may be gifted. We will talk later about what happens if assets are gifted but that is another strategy.
Are Applicants Forced To Spend Their Resources Down To $2,000?
Yes, applicants are forced to spend their resources down to $2,000 as that is an absolute requirement in order to qualify for Medi-Cal. The non-exempt assets must be less than $2,000 in order to qualify. The person must spend down or gift those excess assets before they will qualify for this benefit.
Is There A Penalty Period For Those Who Transfer Or Gift An Asset?
There is a penalty period if the assets are gifted. If they are transferred for value, for instance, to exchange them for something that is exempt, then there is no penalty period. The penalty period for gifts is a look-back period for 30 months so that is two-and-a-half years. When the applicant applies, they have to go back 30 months and disclose all gifts they have made during that time. Any gift made during that time will disqualify the person from benefits from the date of the gift for as many months as it would take if they were paying $8,515 per month. A gift of $20,000 would disqualify the person for two months because 2.5 times $8,515 is $20,000. Medi-Cal does not use partial months and so there are two full months. The person will be disqualified for two months from the date of the gift, not the date of the application. If that $20,000 gift took place more than two months prior to the application, it will have no effect on the application. Under this reasoning, a person could gift somewhere about a quarter of a million dollars and be exempt for 30 months. They would not be able to qualify for Medi-Cal, but they could gift an amount greater than that in any amount and still only be disqualified for 30 months as that is the maximum disqualification period.
If I Am Already Receiving Medi-Cal Benefits, Do I Still Need Medi-Cal Planning?
If you are already receiving Medi-Cal benefits you might possibly still need Medi-Cal planning. With the recovery of assets after the patient dies, the state can take back from the person’s estate the money that they have spent for their care. We may want to plan so that we can limit the amount of that recovery that the state will get of those exempt assets when the patient dies.
Is The Medi-Cal Process Something I Could Do By Myself?
In theory, the Medi-Cal process is something you could do by yourself. In practice, it is probably not something you could do by yourself. If it is for a nursing home care, most nursing homes have someone on staff who can assist in the application process for Medi-Cal. What they cannot do is assist the person in getting their estate prepared for this application. We can help with positioning assets in such a way that the person would qualify for Medi-Cal. After we do that then the person at the nursing home can assist them in actually completing the application.
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