Under Medi-Cal rules, the spouse who needs care is allowed to keep only $2,000.  In compliance with these rules, Medi-Cal plans commonly involve the transfer of assets out of community or joint tenancy accounts and into separate accounts in the name of the spouse who is well.  Any additional resources in excess of $2,000 for an individual, or $109,560 for a married couple,  may be spent down by purchasing exempt or unavailable assets.

The family home can be transferred to anyone, not just a spouse, as long as it is an exempt asset at the time of transfer.  This transfer requires a step-transaction to avoid having the new owners pay unnecessary taxes along and capital gains. The step-transaction documentation should be handled by a qualified Medi-Cal Planning attorney like Judd Matsunaga of Elder Law Services of California.  Additionally, Elder Law Services can assist in the transfer of income (i.e. pension or retirement benefits) to the  spouse who is well.

Anthem plans to leverage ApolloMed’s existing presence in 24 acute care hospitals in the area and to reduce costs by more efficiently managing members’ in-hospital care. The program serves adult Medi-Cal members only. This includes members who are enrolled in California’s Seniors and People With Disabilities (SPD) program, if they have selected Anthem after the shift to managed care this month.

Anthem’s state sponsored business president, Kevin Hayden, said that the agreement with ApolloMed is designed to enhance the quality of care that members receive during hospitalization, which would help improve outcomes.

Anthem members who participate in the program will see a physician several times each day during their hospital stays, which will help docs keep a close eye on their patients’ progress, as well as planning more timely discharges. Transition plans will include outpatient follow-up care as well as support services in an effort to prevent unnecessary readmission.

Hayden said that hospitalization can be upsetting for Anthem members, and that the insurer created the program to be sure that Anthem members have access to comprehensive healthcare and feel confident they will have a successful discharge and recovery period.

President and chairman of Apollo Medical Holdings, Adrian Vazquez, MD, said that ApolloMed’s objective is to “manage members hospitalizations and collaboratively plan for an effective transition to an outpatient setting.”

Considering the current state of healthcare reform and the consistent efforts being made to reduce hospital readmissions, the industry is likely to see the role of hospitalists expanding in the inpatient setting in coming months and years.

Research published by the Journal of the American Medical Association found that when hospitals focus on inpatient management, hospital stays can be reduced by as much as 30 percent—and the associated costs can be reduced as much as 20 percent.

The new hospitalist agreement complements existing Anthem programs that are available to Medi-Cal members, including programs like the DailyMed Pharmacy Program, 24 hour care management and Anthem’s 24 hour physician on call program.

Representatives of ApolloMed said that the medical management services company intends to add more hospitals in the region as well as additional post-discharge outpatient clinics. The idea is to make sure that members have easy access to follow-up care from until their own medical providers are ready to continue managing their care.

By Angela Atkinson

Judd Matsunaga of Elder Law Services is a qualified attorney who has helped hundreds of California residents with Medi-Cal Planning.  Mr. Matsunaga can be reached for a free consultation by calling 1-800 403-6078.

Adult day health care allows older people whose health would send them to skilled nursing homes, to remain at home while still receiving care.

But the service is threatened by the uncertainties of the state’s budget situation.

Elderday is Santa Cruz County’s adult day health center, operated under the auspices of Salud Para La Gente, a federally qualified, Watsonville-based health care provider. Elderday serves 143 people with an average age of 76; about 85 are there daily. Statewide, 37,000 elderly people are served in ADHCs.

The programs have been part of the state’s Medi-Cal system, but Gov. Jerry Brown earlier this year wanted to end this reimbursement, and transition patients to more narrowly targeted home-based care services. While Brown wanted to provide $25 million in state funding to ease the transition for patients, advocates for seniors say there are no home-based programs that can replace the adult day centers, which not only provide health care services and physical therapy but also give patients a chance to share meals and socialize.

Salud has been getting about $76 a day for each client served by Elderday, with the state providing about half that through Medi-Cal.

Currently there are two proposals on the table that could help keep adult day care at least partially funded. Assembly Bill 96, by Van Nuys Democratic Assemblyman Bob Blumenfield, would authorize the state to submit a waiver application to the federal government that would reconfigure adult day centers into similar home-based programs and would allow the state to match federal funds dollar-for-dollar to provide the funding. Blumenfield’s bill was passed earlier this month by the Assembly and has gone to the governor.

An additional proposal would provide $85 million in the budget to keep the infrastructure of adult day health care in place. Unfortunately, this amount would only be about half what the day centers received last year, but it would allow some to stay open, even if the program is restructured.

Staying open is an increasingly urgent need.

At least seven day centers have already closed in the state, or have announced they will close because of the reduced Medi-Cal payments and ongoing budget murkiness.

While cutting spending in California is a budget priority, adult day health care not only provides vital services to our frail elderly, but is cost-effective, since the daily cost is far below what it costs to keep a patient in a nursing home or hospital.

What needs to happen so that we don’t abandon seniors served by adult day centers? The governor needs to commit to the transition waiver. This will allow at least a portion of the program to continue.

And the state needs to adopt a budget so caregivers are no longer having to close down vital programs — and so families won’t have to wonder what will happen with care for their loved ones.

Judd Matsunaga of Elder Law Services is a qualified attorney who has helped hundreds of California residents with Medi-Cal Planning.  Mr. Matsunaga can be reached for a free consultation by calling 1-800 403-6078.

A: Medi-Cal Planning is the systematic approach of helping you protect your home and preserve your assets while still qualifying for Medi-Cal benefits. Medi-Cal Planning is especially important to married couples who are unable to qualify for long-term care insurance or who are unable to pay the high premiums. Medi-Cal eligibility is determined by formulas based on the amount of income and resources available to the applicant. Medi-Cal planning involves the purchasing, transferring, conversion and/or liquidation of assets to enable you or your loved one to qualify under Medi-Cal’s test of income and resources.

Due to changes in federal laws enacted in 1996, almost anyone can qualify under Medi-Cal’s eligibility tests by working within the complex rules and regulations of Medi-Cal. Depending on the individual’s specific circumstances and objectives, the details of Medi-Cal Planning may be different from one individual to the next.

The Department of Health Services (DHS) also requires that a Medi-Cal applicant sign a declaration stating that they are aware of the possibility of a “Notice of Spend down”.

The rules which govern Medi-Cal eligibility are complex and change each year. Consulting a qualified Elder Law Attorney before transferring assets is the best course of action to avoid an improper transfer which may result in a period of ineligibility for up to 5 years.

Q: Is our property protected against Medi-Cal claims if all our assets are in a Living Trust?

A: No. A Living Trust does not protect you from Medi-Cal claims. Any non-exempt property owned by your living Trust is subject to Medi-Cal eligibility rules and recovery claims.

Q: How can I protect my assets and still qualify for Medi-Cal?

A: Since a married applicant who requires long-term care is only allowed to keep $2,000, most Medi-Cal plans would involve taking his or her name off of all community property accounts and/or transferring his or her separate accounts to the spouse who is ‘well’. Any excess resources above $2,000 for an individual, or $109,560 for a married couple, may be spent down by purchasing exempt or unavailable assets. Your home can be transferred to anyone of your choosing, not just your spouse, as long as it is an exempt asset at the time of transfer. This should be done as a step-transaction to avoid having the new owners pay unnecessary taxes along and capital gains. It is also possible to transfer income (i.e. pension benefits) to the well spouse.

Q: What is a Durable Power of Attorney?

A: The Durable Power of Attorney is the single most important document for Medi-Cal planning. This document will enable your agent to act on your behalf by implementing Medi-Cal strategies should you or your spouse require long-term nursing care.

Q: If I already have Medicare are my nursing home costs covered?

A: No. Medicare will only pay for skilled nursing care, not “custodial” care. Even then, Medicare usually only pays for the first 20 days. From days 21 through 100, you pay the largest portion of the bill, and after that Medicare stops paying all together.

Q: What assets can I keep while still qualifying for Medi-Cal?

A: You are allowed to keep your home, a car, and all exempt and unavailable assets.

Q: Can I transfer my assets to my family members in order to qualify for Medi-Cal?

A: Assets can be protected, but only in a special way. Medi-Cal has strict rules against improper transfers which result in a period of ineligibility of up to 5 years. Medi-Cal conducts a “look back” to different time periods to determine if any improper transfers have been made. Consult an experienced Medi-Cal Planning Attorney before attempting to transfer assets.

Q: Who can assist me in transferring or passing my assets to my heirs?

A: You should contact an Elder Law Attorney who understands the latest complex Medi-Cal rules and who can help you to both protect and preserve assets while still qualifying for Medi-Cal.

Q: Don’t we have to be living at the poverty level to qualify for Medi-Cal reimbursement of nursing home costs?

A: No. It’s a very common misperception that Medi-Cal is only available to low-income applicants. California residents with substantial assets can qualify for Medi-Cal and have their nursing home paid for by the state if they know how.

Q: Will I have to sell our family home to qualify for Medi-Cal?

A: Your family home is exempt for Medi-Cal eligibility purposes. However, it is most important to know that certain steps must be taken to prevent Medi-Cal from asserting an estate recovery claim against your home to later recover the amount of nursing home bills it paid on your (or your spouse’s) behalf.

Elder Law Services of California has an extensive background in Medi-Cal Planning, Estate Planning and Real Estate Law. They routinely assists those in need of creating or updating their wills, trusts, powers of attorney and other estate planning legal documents. The firm actively keeps their website up-to-date with the latest information and free resources pertaining to Medi-Cal Qualification and Medi-Cal Planning.

Medicare is a federal insurance program paid out of Social Security deductions. All persons over 65 who have made Social Security contributions are entitled to the benefits, as well as disabled workers who have been eligible for Social Security disability benefits for at least two years.

Participants in the Medicare program are liable for co-payments and deductibles as well as for monthly payments for Part B coverage. Medicare is not based on financial need. Anyone who meets the age, disability and/or coverage requirements is eligible.

Medi-Cal is a combined federal and California State program designed to help pay for medical care for public assistance recipients and other low-income persons. Although Medi-Cal recipients may receive Medicare, the Medi-Cal program is not related to the Medicare program. Medi-Cal is a need-based program and is funded jointly with state and federal Medicaid funds.

Medi-Cal EligibilitySSI and other categorically-related recipients are automatically eligible. Others, whose income would make them ineligible for public benefits, may also qualify as “medically needy” if their income and resources are within the Medi-Cal limits, (current resource limit is $2,000 for a single individual).Share of CostThe State sets a maintenance need standard. Since January 1, 1990 the maintenance need standard for a single elderly/disabled person in the community has been $600 monthly; the Long Term Care maintenance need level (i.e., personal needs allowance when someone is in a nursing home) remains at $35 monthly for each person.

Other Deductions from the Share of Cost:

In addition to the income deductions and the monthly maintenance needs allowance, any monthly medical premiums can also be deducted before the share of cost is determined. Other deductions can also be made, depending on the circumstances.

What Does Medi-Cal Cover?Medi-Cal pays for health care services which meet the definition of medically necessary. Services include: some prescriptions (although the Medicare Part D program now covers most prescriptions), physician visits, adult day health service, some dental care, ambulance services, some home health, X-ray and laboratory costs, orthopedic devices, eyeglasses, hearing aids, some medical equipment, etc.

Resource Limitations (Property/Assets)

To qualify for Medi-Cal the recipient must demonstrate that s/he has limited resources available. Since January 1, 1989, the property limit for one person has been set at $2,000.Medi-Cal classifies property as exempt and non-exempt. Exempt property is not counted in determining eligibility; non-exempt property is counted. If the applicant has more than $2,000 in non-exempt property, he/she will not be eligible, unless the property is spent down for adequate consideration before the end of the application month.

The HomeThe home of a Medi-Cal beneficiary continues to be exempt from consideration as a resource under a wide variety of circumstances. Under these provisions, a home will continue to be considered an exempt principal residenceIntent to ReturnThe principal residence is exempt based upon a person’s subjective intent to return, even though he/she may never have the ability to return to that residence. If the applicant is unable to complete the application, his/her representative may indicate that intent. The eligibility worker may not restrict, in any way, the individual or his/her representative in the process of indicating that intent. As long as the applicant or beneficiary declares an intention to return home on the Medi-Cal application, the house will be treated as a principal residence exempt from being counted as a resource by Medi-Cal.

Other Real Property/Business PropertyReal property other than the principal residence can be exempt if the net market value of the property (minus encumbrances) is $6,000 or less and if the beneficiary is utilizing the property, i.e., receiving yearly income of at least 6% of the net market value.

The amount allowed for upkeep of the home depends on the living circumstances of the LTC resident.

Spending Down/Gifting Assets

An individual whose personal property is above the Medi-Cal resource limit may spend down to $2,000. Resources must be reduced to the property limit for at least one day during the month in which a person is establishing eligibility. Giving away resources may render a person ineligible for a period of time running from the date of the transfer.

Spousal Impoverishment Laws

California law allows the community spouse to retain a certain amount of otherwise countable resources available to the couple at the time of application. This is called Community Spouse Resource Allowance (CSRA) and it increases every year according to the Consumer Price Index. The 2008 CSRA is $104,400.

Ethical Considerations

Property reduction requirements can usually be easily handled and documented, and it can be tempting for many attorneys to advise clients to reduce excess property on the purchase of exempt assets prior to a nursing home entry. It may be difficult however, to find a nursing home placement for a person who has spent all of his/her resources or who has few resources. In addition, a private pay patient may receive a higher level of service.

If you need to learn more about Medi-Cal Planning call Judd Matsunaga, an experienced estate planning attorney who can advise you on matters such as asset protection and Medi-Cal eligibility.  Judd can be reached at Elder Law Services of California at 1-800 403-6078