The Truth Behind the Medi-Cal “Spend-Down”

Will I need to spend down my savings before I can qualify for Medicaid?

Medicaid is a joint federal and state program which offers long term care for seniors. In the state of California, Medicaid is referred to as Medi-Cal. With rising healthcare and nursing home costs, more and more Americans rely on Medicaid to cover their long term care needs. In fact, it is estimated that over 70 percent of the 1.3 million Americans who live in nursing homes use Medicaid to cover the approximately $83,000 in costs per year, according to the U.S. Department of Health and Human Services. Medi-Cal is undoubtedly a wonderful program for many seniors, but much misinformation surrounds the requirements for receipt of benefits.

Medi-Cal Coverage

As we age, many of us will require additional care. Medicare will only cover the first 100 days of nursing home care. After you or your loved one exceeds this period, you will be forced to either cover the costs of care yourself or seek Medi-Cal coverage. With many nursing homes in California charging upwards of $8,000 a month for care, entrance into a nursing home can bankrupt a family. Medi-Cal can cover up to 100 percent of the costs for long term nursing home care, proving lifesaving for many families.

Qualifying for Medi-Cal

Medi-Cal applicants must meet certain physical and financial qualifications in order to obtain coverage. To be eligible for nursing home care coverage through Medi-Cal, the applicant must be expected to live more than 30 days in a nursing home facility. The applicant must require nursing home care because he or she cannot perform daily living tasks alone, like taking medication, bathing, moving around, and the like.

Medi-Cal applicants must meet asset and income limits. Single individuals applying for coverage must have no more than $2,000 in countable assets. For married couples, where one spouse is applying and the other will stay home, the other spouse can maintain up to $123,600 in assets. Several assets are considered exempt for Medi-Cal eligibility purposes, including your primary home, one car, personal effects, household items, and more.

The Medi-Cal Spend-Down

Many people have been told or heard that they will need to spend down their assets in order to qualify for benefits. The reality is that rarely will an applicant need to spend down their assets in order to qualify. With the numerous Medi-Cal property exemptions and the many steps you can take in advance of applying to protect your assets, the spend down is seldom necessary. Contact an elder law attorney for more information on applying for Medi-Cal benefits.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.