The following discussion is meant to give a broad understanding of how Medi-Cal is designed to help pay for long term care medical costs. It is not meant to be used as guidelines to qualify for benefits. This area of California law is complex and individual facts will vary. Please contact an elder law attorney for advice related to your specific facts.

medicare factsMedi-Cal is a state run need-based program funded jointly with federal Medicaid funds designed to help pay for medical care for public assistance recipients and other low-income persons. Although Medi-Cal recipients may receive Medicare, the Medi-Cal program is not related to the Medicare program. Medicare does not pay for long term care. However, Medicare does pay for up to 100 days of skilled nursing in a nursing home for rehabilitation purposes.

There is no income limitation in California for Medi-Cal. SSI and other categorically-related recipients are automatically eligible. Others, whose income would make them ineligible for public benefits, may also qualify as “medically needy.” An individual or married couple can have any amount of monthly income and qualify for benefits. However, if your net monthly income is higher than the state payment rate, you may be required to pay a portion of your income on monthly medical costs. This is called the share of cost. Share of cost is calculated differently if the Medi-Cal recipient is married or single. Married couples may keep at least $3,260.00 per month before any contribution must be made towards share of costs. This amount can be higher depending upon who generated the income. If the income belongs to the well spouse it does not count towards share of costs and may be kept by the community spouse (well spouse).

Resource Limitations – To qualify for Medi-Cal the disabled recipient must demonstrate that limited resources are available. Since January 1, 1989, the property limit for one person has been set at $2,000.

Medi-Cal classifies property as “exempt” and “non-exempt.” Exempt property is not counted in determining eligibility; non-exempt property is counted. If the applicant has more than $2,000 in non-exempt property, s/he will not be eligible, unless the property is spent down for adequate consideration (in other words, not gifted away) before the end of the application month.

The following property is generally considered exempt:

  • Community Spouse Resource Allowance (CSRA)
  • The Home: if it is the principal residence. Includes mobile home, houseboat, or an entire multi-unit dwelling as long as any portion serves as the principal residence of the applicant.
  • Other Real Property: can be exempt with some restrictions.
  • Household Goods and Personal Effects: totally exempt.
  • Jewelry: with some restrictions.
  • Cars/motor Vehicles: one car, if used for the benefit of the applicant/beneficiary or if needed for medical reasons.
    Whole Life Insurance: policies with a total face value of $1,500 or less. If the total face value of the policy or policies exceeds $1,500, then the cash surrender value of the policies is counted toward the $2,000 cash reserve.
  • Term Life Insurance
  • Burial Plots
  • Prepaid irrevocable burial plan of any amount and $1,500 in designated burial funds
  • IRAs and work-related pensions: In applicant’s/beneficiary’s name: The balance of the IRA or the pension is considered unavailable if applicant/beneficiary is receiving periodic payments of interest and principal. In spouse’s name: The balance of the IRA or Pension fund is totally exempt from consideration and is not included in the community spouse resource allowance (CSRA).
  • Non work-related annuities: This area of the law has resulted in many changes since August of 2003. If you have annuities, or are considering purchasing an annuity prior to qualifying for benefits, please see an attorney well versed in Medi-Cal law for an opinion prior to purchasing any insurance product. Note: Annuities purchased by the applicant/beneficiary on or after 9/1/04 will be subject to Medi-Cal recovery when the beneficiary dies.
  • Cash reserve: Applicant/beneficiary may retain up to $2,000 in liquid assets, e.g., savings, checking, excess cash surrender value of life insurance.

Spousal Protections – Two concepts are important in understanding Medi-Cal’s spousal protections.

First, the Community Spouse Resource Allowance (CSRA): This is the net worth that the well spouse (community spouse) can have when the disabled spouse applies for Medi-Cal assistance. It increases every year according to the Consumer Price Index. The current (2021) CSRA is $130,380.

Separate property of the well spouse will be counted in the total resources and subjected to the $130,380 limit. However, only non-exempt resources are counted in the spouses’ combined, countable resources at the time of application for Medi-Cal. Thus, IRAs in the well spouse’s name, household goods, personal effects, a car, the house, jewelry, etc. are all totally excluded, regardless of value, and the well spouse can retain these, as well as the CSRA of $130,380.

Second, the Community Spouse’s Minimum Monthly Maintenance Needs Allowance (MMMNA): This is the monthly income amount the well spouse is entitled to keep while the disabled spouse is receiving Medi-Cal assistance. California law allows the community spouse to retain a minimum monthly maintenance needs allowance (MMMNA for 2021) of $3,260.

If the well spouse’s income is below the MMMNA, then as much of the disabled spouse’s income as is necessary can be allocated to the well spouse to bring the community spouse up to the $3,260, saving more of the family income for the well spouse.

What if the well spouse needs more than $3,260 per month to meet his or her basic needs? The well spouse may be able increase his or her minimum monthly income by filing for a fair hearing to increase the CSRA to generate additional income and/or obtaining a court order to obtain additional income-generating resources. If the community spouse’s income in his or her name alone exceeds the MMMNA, the community spouse may keep it all. For example, if the spouse at home received $5,000 per month in income, he/she can retain all of that income, but will not receive a spousal allocation from the nursing home spouse, because the community spouse income is above the $3,260 MMMNA.

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