Nursing homes are often misunderstood, but it’s important to understand the facts when considering care for yourself or a loved one. According to recent research, there are multiple misconceptions about nursing homes and the impact they can have on an individual’s assets. Educating oneself on these matters can be extremely beneficial, as it will ensure you make an informed decision about your health and financial situation.
Misconception No. 1 – If I have Medi-Cal, I Don’t Have to Pay Anything for Nursing Home Costs
Even if you qualify for both Medicare and Medi-Cal, you may still have to pay a portion of your income towards your Monthly Resident Cost that is treated much like rent at a nursing home. Review your income with an experienced professional who can help you navigate the rules of Monthly Resident Cost.
Misconception No. 2 – I Have Too Much in Assets to Qualify for Medi-Cal
The Medi-Cal eligibility rules have changed effective January 1, 2024. Medi-Cal no longer looks at your assets to determine whether you qualify for Medi-Cal benefits, and the look-back period no longer applies. That means that it does not matter what assets you have or their value to determine if you qualify for Medi-Cal. Therefore, it is possible for you to qualify for Medi-Cal, no matter what you own.
Misconception No. 3 – You Can’t Apply for Medi-Cal After You Are Already In A Nursing Home
You can certainly apply for Medi-Cal benefits when you are in a nursing home. Once you qualify, the benefits relate back to when you applied. Thus, if you are on Medicare and you may be in a nursing home for longer than 100 days, you will want to apply for Medi-Cal while you are in the nursing home in order to have your benefits start from the date of your application.
Misconception No. 4 – Applying for Medi-Cal After Making A Gift May Be Restricted Within A Five-Year Timeframe
Since January 1, 2024, making gifts to other parties does not reduce Medi-Cal benefits within a five-year period. Since California has done away with asset test, there is no penalty imposed in the form of a number of months of ineligibility if assets have been transferred.
Misconception No. 5 – Medicare Is Enough, I Do Not Need Medi-Cal
It is true that Medicare is the primary insurance for those over the age of 65 years. However, there are limits to what Medicare will pay for. While Medicare will pay in full for the first 20 days in a skilled nursing facility, the patient will pay a daily share of costs for the 21st through 100thday in the nursing home. After the 100th day, Medicare stops paying. If it is medically necessary for the patient to remain in the nursing home, then they must either pay for their stay with long-term care insurance, Medi-Cal, or self-pay out-of-pocket. Since Medi-Cal will pay for long-term care in a nursing home, it is the most widely available payment source for most patients.
Misconception No. 6 – If My Spouse Or I Go Into A Nursing Home, The State Will Take My Assets
Individuals receiving Medi-Cal benefits are subject to asset recovery laws in the form of a recovery lien against all probate assets when that individual passes away. If an individual passes away while having received Medi-Cal benefits, some of their remaining assets may be recovered by the state as reimbursement for the benefits they received. Therefore, even though individuals receiving Medi-Cal may not necessarily have all of their assets taken away upon entering a nursing home, California requires reimbursement of certain types of long-term care expenses from individuals who pass away with remaining assets in probate.
Misconception No. 7 – If My Spouse Or I Go Into A Nursing Home, I Will Lose My Home
During your lifetime, no one will take away your home. The big issue is the Medi-Cal recovery lien being attached to your home that goes through probate when you pass away having received Medi-Cal benefits. Owning a home and not having it in a trust will subject it to recovery for nursing home expenses. After death, a properly-titled home is not subject to probate nor does it become available to be used as part of the state’s Medi-Cal estate recovery program, which is utilized to pay back California for any Medi-Cal benefits received.
Misconception No. 8 – By Purchasing a Medi-Cal-friendly Annuity I Can Protect My Assets
Once a popular Medicaid pre-planning tool in other states, annuities have never been a tool used in California to allow for eligibility for Medi-Cal. Most annuities marketed as “Medicaid-friendly” are simply deferred annuities that can be converted into monthly Medicaid-qualifying payments over the owner’s lifetime. While these payments are considered income and therefore not countable assets for Medicaid purposes in other states, the options for using these annuities to qualify for Medi-Cal are non-existent since California has done away with the asset test for Medi-Cal eligibility.
Misconception No. 9 – There Is A Slim Chance That I will Go into a Nursing Home
Senior citizens have a significant chance of spending long-term stints in a nursing home; according to New England Journal of Medicine findings, an estimated 43% of people aged 65 and above will spend some time in such facilities during their lifetimes. Of those individuals, the majority (55%) will remain for one year or more, while around 21% will be living in a nursing home for five years or longer. Consequently, seniors must prepare themselves for the possibility of spending at least one year in a nursing home.
Misconception No. 10 – There is no need for Long-term Care Insurance If I Apply For Medi-Cal
Long-term care insurance policies are becoming increasingly popular as they offer a much more flexible way of paying for long-term care expenses compared to traditional Medi-Cal coverage, which is usually limited to specific nursing homes. These modern policies are designed to cover costs associated with assistance at home, adult foster care homes, assisted living facilities, and nursing homes, allowing people to receive the help they need while remaining in their preferred environment.
Misconception No. 11 – If I Am Already In A Nursing Home, It Is Too Late To Protect My Assets
It is possible to protect assets even after being in a nursing home for a prolonged period of time. Even after years of paying for nursing home expenses out of pocket. In cases where one spouse is in a nursing home while the other lives at home, it is usually possible to protect nearly all of the assets for the stay-at-home spouse. Even if both spouses are in a nursing home or if an unmarried individual is in a nursing home, it is still possible to protect a significant portion of the assets.
However, Medicaid and asset protection planning can be complex and should not be attempted without the guidance of an experienced elder law specialist. Attempting to navigate these issues alone can result in Medicaid ineligibility for months and additional costs and expenses. It is important to consult with a knowledgeable professional who can advise you properly.
Misconception No. 12 – I Was Advised To Exhaust My Assets In Order To Qualify For Assistance
California has eliminated the asset test for eligibility for Medi-Cal, thereby making it unnecessary to spend down to get on Medi-Cal. And for married couples, it is almost always unnecessary to spend down; any advice suggesting that this is their only option should be rejected. The fact is, there are numerous other avenues and strategies that can be pursued to take advantage of available benefits and resources without having to deplete one’s savings or assets. Consulting with an experienced Elder Law Attorney can help provide comprehensive information about the best options available for each unique situation.
Misconception No. 13 – Going by the Old Rules of Medi-Cal
First off, California is unique and the envy of people in all other states for its generous rules for qualifying for Medi-Cal. But the rules have changed as of January 1, 2024, in California and if you do some research, you may be looking at the old rules or the rules of another state. It is essential to speak with a California attorney who is knowledgeable about the new Medi-Cal rules and how to take advantage of them to protect your family.
