Medi-Cal Rules Keep Changing
Here Is a Summary of the Prior Rules and the Current Rules
There is a tremendous amount of misinformation regarding Medi-Cal. In order to understand what the rules are currently, a brief discussion of what they were is important.
The next step was to determine the value of the applicant’s non-exempt assets. In order to qualify for Medi-Cal, the value of the applicant’s non-exempt assets could not exceed the asset limit for the year of the application. This number changed slightly every year. The third and final step was the income test. If the applicant’s monthly income exceeded a certain amount, they couldn’t qualify for Medi-Cal. There was a minor exception. If the income test wasn’t met, depending on the circumstances, Medi-Cal would pay a portion of the medical expenses if the applicant’s income was not sufficient to pay for their medical expenses. Be careful — qualifying for Medi-Cal wasn’t the last hurdle. Upon the death of the applicant (or their spouse if they were married), the state would “recover” the expenses paid by Medi-Cal during the applicant’s life. Keep in mind, many of these rules have changed dramatically. The reason why it is important to understand the “old” rules is to recognize where many of the rumors come from. The new rules have removed the most challenging part of qualification, the asset test. Now we don’t have to determine which assets are exempt and calculate the value of the remaining assets. There is no asset test.
One of the challenges in understanding the Medicaid rules is that it is often confused with Medi-Cal and Medicare.
First, let’s make sure we understand the differences and similarities. Medicaid is the same thing as Medi-Cal. Medicaid is a federal program administered by state. For some reason, many years ago in California, Medicaid got the nickname Medi-Cal and it stuck. When you read articles or see news reports about Medi-Cal and/or Medicaid, remember, Medi-Cal is California’s version of Medicaid. They are not two different programs. However, Medicare is completely different from Medicaid/Medi-Cal. Medicare is a federal health insurance primarily for people age 65 or older. Whereas Medicaid or Medi-Cal pays for the medical expenses of low-income individuals and families of any age. Obviously, qualifying for Medicare is not difficult. You simply attain the age of 65. However, to qualify for Medi-Cal, there have always been some type of financial restrictions. Some of those rules still apply, some do not. To understand what the rules are and why there is so much misinformation, we need to go back to the old rules. In prior years, there were three steps to determine whether a person (an “applicant”) could qualify for Medicaid. The first step was to determine if there were any “exempt” assets in the applicant’s estate. For example, if the person trying to qualify was in a skilled facility and intended to return to their personal residence, that personal residence was considered an “exempt” asset. There were other assets that were also considered to be exempt, but the personal residence was the primary “exempt” asset.
However, there is still an income test. An applicant’s ability to qualify is based on the applicant’s income and the applicant’s family size.
Does the state still try to “recover” the expenses paid for the applicant during their lifetime? Yes, unless the applicant’s assets are not subject to probate, as would be the case if the assets were registered in a Living Trust.
2 PrestonEstatePlanning.com
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