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Horizon Elder Law & Estate Planning Blog

Tuesday, December 19, 2017

Understanding Medicare for Long-term Care Planning

Long-term care could be one of the most daunting expenses you ever face. You should consider this cost when you are strategizing for your financial future. You need to know what Medicare will pay for your long-term care and what other resources are available. Let’s talk about understanding Medicare for long-term care planning.

What Medicare Covers for Long-Term Care

Medicare does not provide many benefits for nursing home care. Even though you paid into the system for many years through the money your employer withheld from your paycheck, Medicare’s long-term care benefits are quite limited.After a hospitalization of at least three days with a qualifying illness or injury (a chronic medical condition does not count), if you need skilled nursing services for a limited number of days to recuperate (convalesce), Medicare can help you with the cost of the skilled nursing facility. Skilled nursing care is not ordinary nursing home care. Skilled nursing care is a higher level of medical care than the custodial care a nursing home provides. Medicare will pay as much as 100% of your first 20 days and a portion of the cost for days 21 through 100. After 100 days, Medicare will not pay anything. 

Medi-Cal and Nursing Home Costs

California residents have access to Medi-Cal, a program funded by both state and federal Medicaid funds. Unlike Medicare, which requires that you paid into the system for many years, Medi-Cal is need-based. If you meet the eligibility guidelines, Medi-Cal will pay for medically necessary health care services. If your health care provider sends in a prior authorization, Medi-Cal will cover your nursing home expenses. Your physician must certify that it is medically necessary for you to stay in a nursing home.
Medi-Cal will also pay for these services if they are medically necessary:

  • Some prescriptions drugs that are not covered by Medicare Part D
  • Doctor visits
  • X-ray and lab costs
  • Eyeglasses, hearing aids and some orthopedic equipment,
  • Ambulance services,
  • Some dental services
  • Some home healthcare and medical equipment

How to Qualify for Medicare

You must have paid into the system through your paycheck deductions to qualify for Medicare. There are no income or asset restrictions for Medicare eligibility. You could be a millionaire, living in a mansion and making six figures or more a year and still be eligible for Medicare. Unfortunately, Medicare does not cover many nursing home expenses.

Qualifying for Medi-Cal

A California resident with no more than $2,000 in “countable assets” (for an individual) and income that does not exceed the limit for the Medi-Cal program she applies for (such as the Aged and Disabled Program) can be eligible for Medi-Cal. Some people with severe medical conditions can have a higher income limit. Not all assets count toward the $2,000 limit. Some examples of exempt property include:

  • Your principal residence
  • Household goods and personal items
  • One vehicle for transportation
  • Term life insurance
  • Burial plots
  • Some IRAs and work-related pensions
  • Some non-work-related annuities

The rules on Medicare and Medi-Cal are constantly changing. Request a consult with the professional Medi-Cal planning attorneys at Horizonlaw today to talk about your options.


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