Medi-Cal Planning and Nursing Home Care
In the event that you or a loved one expects to enter a skilled nursing home, the expense of such may be an unfortunate factor in making this decision. In California, the average cost per month can be anywhere from $8,500 – $10,000. To assist individuals, Medi-Cal is available to eligible citizens. Once an application is accepted, you or your loved one will no longer need to worry about such a high monthly bill.
However, one very important thing must be kept in mind. At the passing away of the individual receiving these government benefits – the government will become a creditor and seek to recover any and all paid money from the estate of the decedent.
For example: Sarah, who is 70 and now seeking care in a skilled nursing home applies for Medi- Cal and after meeting the eligibility requirements has her monthly bill of $10,000 covered. After three years of living at the nursing home, she passes with roughly $500,000 in her estate. As a creditor, the government will get back $360,000 ($10k x 12 months x 3 years) leaving Sarahâ€™s loved ones with only $140,000 out of the $500,000!
With proper Medi-Cal planning coupled with Estate Planning, Sarah would still be able to have enjoyed the government benefits while also leaving her entire estate for her loved ones and out of reach from creditors such as the government.
To become eligible for Medi-Cal there are various techniques available to help people bring their “resources” or assets, within the limits established by the Medi-Cal program. Many people at first will claim “transfer, transfer, transfer” as a method of moving assets around and becoming eligible for Medi-Cal. It is vital to understand the laws concerning transfers and the possibly penalties an individual may face for invalid transfers.