Medi-Cal Update - Rule Changes

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Medi-Cal Nursing Home Care Update: Rule Changes

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Your Medi-Cal Update

Issue Date: February 1, 2007

Nursing home care in California costs about $5,000 per month ($60,000 a year). It doesn’t take long for many nursing home residents to deplete their savings. Meaningful government help for long-term nursing home care costs is available only if a person is eligible for Medi-Cal. Medi-Cal is California’s version of the federal Medicaid program, and is managed by the Department of Health Services (DHS).

A person must pass three distinct tests to be eligible for Medi-Cal nursing home benefits:

The person must be 65 or older, or blind, or disabled.

The person’s condition must require nursing home care (custodial or personal care needs can be sufficient).

The value of the person’s assets (and those of their spouse) must be within the Medi-Cal limits on countable assets.

Making gifts can render a person ineligible for Medi-Cal nursing home benefits for a period of time. Spousal protection numbers for 2007 The spousal protections are the most generous part of the Medi-Cal long-term care program. The protections apply when one spouse needs nursing home care, but the other spouse is healthy enough to remain at home. They were designed so that care for one spouse would not impoverish the other – who needs to keep up the home, and could outlive the nursing home spouse for years.

Under the spousal protections, the at-home spouse can retain countable assets at least equal to the Community Spouse Resource Allowance. The CSRA changes at the first of each year. On Jan. 1, it increased to $101,640. If the at-home spouse’s monthly income is below the Monthly Needs Allowance, the at-home spouse may be allowed to retain countable assets even greater than the CSRA. The MNA changes at the first of each year. On Jan. 1, it increased to $2,541.

DRA changes

In early 2006, President Bush signed into law the Deficit Reduction Act of 2005 (the DRA), changing federal law. In general, the DRA changes would make it more difficult to become eligible for Medi-Cal. Remember, Medi-Cal is a combined federal and state program. For the most part, implementing the DRA in California will first require the passage of new legislation by the California Legislature and/or the adoption of new regulations by DHS. To date, no such new legislation or regulations have been adopted. At this moment, no one knows if, when or how the Legislature and/or DHS will act.

The following table outlines the major DRA changes that could impact the Medi-Cal long-term care program.

Topic	DRA Change / Current Law	California Status
Start of Ineligibility Period	The ineligibility period for people who make gifts prior to applying for Medi-Cal would not start until the person applies for benefits (when they have minimal assets). Under current law, any ineligibility period starts when the gift is made.	No action taken yet.
Weaken Spousal Protections	Eliminates the additional countable asset protection for the at-home spouse, if the couple’s combined monthly income is $2,541 or more. Under current law, through a fair hearing or court order, an at-home spouse can retain additional countable assets if his or her monthly income is below $2,541.	DHS now applies this change in fair hearing situations.
Lengthen Look-Back Period	Ineligibility penalties would apply for gifts made within 60 months before applying for Medi-Cal. Current law looks back 30 months.	No action taken yet.
Home Equity Limits	Homeowner would be ineligible if he or she has home equity of $500,000 or more ($750,000 or more at state option), unless the spouse or minor or disabled child is living in the home. No such limit under current law.	No action taken yet.
CCRC Limits	Continuing Care Retirement Community could restrict what a resident does with the resident’s assets; and CCRC deposits (if refundable at death) would be counted against resident in Medi-Cal eligibility testing. No such limits under current law.	No action taken yet.
Daily Penalty Periods	Ineligibility periods resulting from gifts would be calculated in days. Current law calculates ineligibility in full months, and rounds down (allowing a person to make smaller gifts without penalty).	No action taken yet.
Others	Would add restrictions on arcane arrangements involving annuities, notes, loans, and purchases of life estates in others’ homes.	No action taken yet.