Congress passed the DRA (Deficit Reduction Act) on February 8, 2006. This act makes qualification for Medi-Cal benefits much more difficult. Congress mandated that the various states adopt the DRA into their rules, and Governor Schwarzenegger signed the DRA into law in California on September 27, 2008. We have been informed that the new DRA rules will become effective in California in the next several months.
One of the most onerous changes for Medi-Cal qualification will involve the penalty period which is created when a gift has been made by the Medi-Cal applicant. There is presently a 30 month look back period for gifts of non-exempt assets. So for example, if a gift was made by the Medi-Cal applicant in the amount of $30,000 within the last 30 months, this amount is divided by the penalty divisor of $7,092, which creates 4.23 months of ineligibility, which is rounded down to 4 months of ineligibility. If this gift was made in November 2012, the applicant would be eligible for Medi-Cal in March 2013, if otherwise qualified. These are the present rules, which we can use for pre-planning for Medi-Cal qualification.
Under the new DRA rules, there is a 60 month look back period, with an added, very negative twist. If the applicant gifted the same $30,000 within the last 60 months, 4.23 months of ineligibility would be created, and that number is not rounded down. If this gift was made in November 2012, she would not be eligible for Medi-Cal for 4.23 months AFTER she is admitted to a nursing home, and is otherwise qualified. For a single person to be otherwise qualified, she could have no more than $2,000 of non-qualified assets. The question will be how to be able to pay for the nursing home for the 4.23 months, and this will be extremely difficult for many people.
If you are considering planning for Medi-Cal and asset protection, you should have your estate planning documents updated to include asset protection and public benefits planning language, and you should consider visiting your elder law attorney as soon as you can for pre-planning.
Written Michael J. Young, elder law attorney and probate attorney in Walnut Creek, CA and former in-house counsel for title insurance companies. www.WalnutCreekElderLaw.com LawYoung1@Gmail.com 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Walnut Creek, Alamo, Danville, Concord, Brentwood, Pleasant Hill, Antioch, Clayton, etc. Mr. Young advises clients regarding Probates, Probates with Real Estate, Medi-Cal, nursing homes, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney