What is Medi-Cal?
Medi-Cal is a program that pays for long term nursing home care.
To qualify for Medi-Cal a single applicant may not have more than $2,000 of non-exempt or countable assets.
What are non-exempt assets?
Non-exempt assets are the things that you own that Medi-Cal will count as available to you and could be used to pay for your care. This includes assets such as:
checking and savings accounts, certificates of deposit, stocks and bonds
mutual funds, tax-deferred annuities, real property other than home
What are exempt assets?
Exempt assets are those things you own that Medi-Cal does not count when determining your eligibility. This includes such property as:
household goods, personal property, family and heirloom jewelry
certain types of immediate annuities
burial plots and crypts, irrevocable burial trust, $1500 in a revocable burial fund
What about my income?
Once you are approved for Medi-Cal you will need to pay a portion of your income to the nursing home as your share of cost. This is similar to an insurance deductible paid on a monthly basis.
Most of your income will go to the nursing home except for a $35 allowance for your personal needs.
What about my IRA's?
IRA's, 401k's and other retirement accounts are completely exempt if owned by the at-home spouse of a nursing home patient applying for Medi-Cal.
The IRA's and 401k's owned by a Medi-Cal applicant are also exempt if the applicant is taking annual minimum distributions, which are required at age 70.5 but can be taken earlier in order to shelter an otherwise non-exempt account.
Medi-Cal for Couples:
If your spouse is in a nursing home, you are allowed to keep more non-exempt assets.
In addition to the $2,000 your spouse may keep, you are allowed to keep a Community Spouse Resource Allowance (CSRA) of $109,560 (2011).
The "at home" spouse can keep all of his or her income regardless of the amount.
If the at-home spouse's monthly income is less than the Minimum Maintenance Needs Allowance ($2,739 for 2011), then the at-home spouse can also keep enough of the institutionalized spouse's income to bring the at-home spouse's monthly income to $2,610.
If the at-home spouse's fixed monthly income is less than $2,739, you can keep more of your assets by increasing the Community Spouse Resource Allowance. This is accomplished by applying for Medi-Cal, getting rejected for being over the resource limits, and appealing Medi-Cal's rejection through a fair hearing process before an administrative law judge.
Alternatively, it is possible to obtain a court order increasing the amount of assets the at-home spouse may own. If it can be shown that you need more assets to provide you with investment income, then the judge must allow you to keep additional assets.
You can obtain a court order to transfer assets, increase your resource allowance, or increase the amount of income you may receive from your spouse.