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Horizon Elder Law & Estate Planning Blog

Sunday, July 26, 2015

Common Misconceptions About Medi-Cal and Nursing Homes

1.  IF I NEED A NURSING HOME, THE HOSPITAL SOCIAL WORKER CAN FILE A MEDI-CAL APPLICATION.

Although a social worker can file an application, he or she will rarely have the proper understanding of the complicated eligibility rules. A qualified elderlaw attorney can guide you in avoiding costly mistakes that commonly occur when hospital staff files the application

2.  I TRANSFERRED ASSETS IN THE LOOK BACK PERIOD SO I CAN’T QUALIFY FOR MEDI-CAL.

Not always. California has a 30 month look-back rule. Any transfers that took place during that period must be disclosed. Depending on the transfers, there may or may not be a penalty. That penalty may have already expired or may still be in effect.  

 3.  I CAN'T TRANSFER ASSETS AFTER I AM IN A NURSING HOME.

Not true. The look-back period begins when a Medi-Cal application is submitted, not when admitted to the nursing home.  Not all transfers are subject to penalties, no matter when they occurred. Some transfers are exempt.  

4.  I SHOULD SIGN MY HOUSE OVER TO MY CHILDREN TO PROTECT IT.

This is almost always untrue. Always consider the tax ramifications of gifting your house. Commonly a person gives a house to a child after the house is significantly appreciated in value.  When the child sells the house, the child must pay capital gains tax on the gain. If the house is sold by the parent, capital gains tax is usually avoided. Often the solution is to transfer the house into a trust.  Each case must be analyzed individually.

5.  I WAS TOLD MY ONLY CHOICE WAS TO SPEND DOWN. 

In the case of a married couple, it is almost always unnecessary to spend down.  Even single persons can benefit from Medi-Cal planning. If spending down is the only advice you are receiving, you are talking to the wrong person.

6.  IF MY SPOUSE GOES TO A NURSING HOME ALL OF HIS OR HER INCOME GOES TO THE NURSING HOME.

Medi-Cal allows the spouse to keep $35.00 per month as a personal needs allowance. In addition, he may keep an amount necessary to pay for their private medical insurance. The law also guarantees that the well spouse receives a minimum amount of income.  For 2015, the well spouse is guaranteed at least $2,981 of income per month.

Nursing home care is costly. There is almost always Medi-Cal compliant planning available to preserve assets. Discuss your options with an elderlaw attorney well versed in the rules.


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