Medicare is the federal insurance program that applies to adults over the retirement age. Once you turn 65, you can typically rely on Medicare for standard medical support. Those who need exceptional levels of medical care may find that Medicare is not sufficient.
People who eventually require an extended stay in a rehabilitation facility and those who need to live in a nursing home won’t have Medicare benefits cover all of those costs. Instead, they will need to apply for the California Medicaid program, Medi-Cal.
Medi-Cal is a need-based program. It will cover more than Medicare does, but there are some trade-offs for that better coverage. Older adults who might eventually need Medi-Cal benefits should consider planning ahead long before they need that coverage.
The state looks back at your financial records
Simply having a limited income isn’t automatically enough to qualify for benefits. The state will also look at someone’s personal property. Although owning a home won’t prevent you from getting Medi-Cal, much of your other property could interfere with your benefits claim.
Any transfers you make to family members or into a trust in the 30 months before you apply for Medi-Cal can trigger a penalty. You will have to pay out of pocket before the state starts to cover your care. Making transfers and changing the ownership of certain assets at least 30 months before you apply will help you avoid those penalties.
The state wants you to repay the benefits you do receive
Although the state won’t hold ownership of a house against you when you apply for benefits, the Medi-Cal estate recovery program will make a claim against your house and any other major assets after you die.
Obviously, such a claim could significantly the legacy that you leave behind for your loved ones. In some cases, repaying Medicaid benefits will take up everything left in someone to stay. If you plan ahead before applying for benefits, you will benefit in numerous ways. You will have a better chance of an approval without a penalty, and there will be less risk of estate recovery efforts after you die.
Planning ahead to qualify for Medi-Cal protects you as you age and the people in your family as well.