Medi-Cal is a joint federal-state program that provides health insurance to low-income Californians, including seniors and persons with disabilities. Medicaid programs like Medi-Cal are funded by federal and state funds and are administered by individual states.
What is a Medi-Cal Asset Test?
A Medi-Cal Asset Test is a process for determining eligibility for Medi-Cal benefits by evaluating an applicant’s assets. The purpose of the Asset Test is to limit access to Medi-Cal to only those who do not have sufficient resources to pay for their own long-term care. The idea is that if people have substantial assets, they could use these to pay for the care they need.
Who Is Subject to Medi-Cal Asset Testing?
All applicants need to declare their assets as part of the Medi-Cal review process. The following categories of seniors and persons with disabilities are subject to asset testing to qualify for Medi-Cal:
1. SSI Recipients
Those who receive Supplemental Security Income (SSI). SSI is for people with low incomes who are 65 or older, as well as blind or disabled people of any age. SSI eligibility is conditioned on a maximum asset limit.
2. SSI Eligible
Those who would otherwise meet the income and resource requirements of SSI or other benefit programs but do not receive cash assistance.
3. Below Poverty
Seniors and persons with disabilities with incomes less than 100% of the federal poverty limit (FPL).
4. Medically Needy
Seniors and persons with disabilities who have high medical expenses and who meet all eligibility requirements for Medi-Cal except for income.
What are Medi-Cal Asset Limits?
To be eligible for Medi-Cal under any of these categories, applicants must meet, among other requirements. Seniors and persons with disabilities cannot have more than $2,000 in assets for an individual or $3,000 for a couple, if both are applying for Medi-Cal for long-term care.
What are Real Property Assets?
“Real Property” is land, buildings, mobile homes which are taxed as real property, life estates in real property, mortgages, promissory notes, and deeds of trust. These are considered “countable assets” when assessing for Medi-Cal eligibility.
What are the Exemptions to Real Property Assets?
1. Principal Residence
Property used as a home is exempt (not counted in determining eligibility for Medi-Cal). When an applicant or beneficiary is absent from the house for any reason, including institutionalization, the home will remain exempt if the applicant or beneficiary intends to return home someday.
The home also continues to be exempt if the applicant’s or beneficiary’s spouse or dependent relative continues to live in it. Money received from the sale of the home can be exempt for six months if the money is going to be used for the purchase of another home.
2. Other Real Property
Real property value up to $6,000 of the equity value in non-business real estate (excluding the home), mortgages, deeds of trust, or other promissory notes may be exempt. In order to receive this exemption, the property must produce an annual income of 6 percent of the net market value or current face value.
3. Real Property Used in a Business or Trade
Real estate used in a trade or business is exempt regardless of its equity and whether it produces income.
What are Personal Property Assets?
“Personal property” is any kind of liquid or non-liquid asset, i.e., cars, jewelry, stocks, bonds, financial institution accounts, boats, trucks, trailers, etc. Property that is not counted in determining your eligibility is called “exempt” or “unavailable” property.
What are the Personal Property Exemptions?
1. One Motor Vehicle
2. Personal Property Used In a Trade or Business
3. Personal Effects
This includes clothing, heirlooms, weddings and engagement rings, and other jewelry with a net value of under $100.
4. Household Items
5.IRAs, KEOGHs and Other Work-related Pension Plans
These funds are exempt if the family member whose name it is in does not want Medi-Cal. If held in the name of a person who wants Medi-Cal and payments of principal and interest are being received, the balance is considered unavailable and it is not counted.
6. Irrevocable Burial Trusts or Irrevocable Prepaid Burial Contracts
7. One Revocable Burial Fund
Or revocable prepaid burial contract with a value of up to $1,500 plus accrued interest per person.
8. Burial Space
9. Musical Instruments
10. Recreation Items
Including TVs, VCRs, computers, guns, collections, etc.
11. Livestock, Poultry, or Crops
12. Insurance Policies
Countable property equal to the amount of benefits paid under a state-certified, long-term care insurance policy. Each person may have life insurance policies with a combined face value of $1,500 or less accrued interest and dividends.
What is a Property Reserve?
Property Reserve is all of your countable property (property which is not exempt or unavailable). Your countable property must not exceed the property reserve limit. Any amount over the property reserve limit will make you and/or your family ineligible for Medi-Cal. To be eligible for Medi-Cal, your countable property may not exceed the following property reserve limits:
Number of Persons Whose Property is Considered, i.e. Principal, Spouse and Family Members
Property Reserve Limit
10 or more
How To Reduce Your Property Reserve
Here are nine allowable expenses and adjustments that you can do to reduce non-exempt property without incurring a period of ineligibility for nursing facility level of care:
- Pay Medical Bills
- Buy Home Furnishings
- Pay Off Home Mortgage
- Buy Clothes
- Spend on Home Repairs
- Pay Off Car Loan
- Pay Off Outstanding Debts
- Liquidate non-liquid assets such as obtaining the cash surrender value on non-exempt life insurance policies, list property for sale with a qualified broker etc.
- Borrow against excess property to cover the cost of medical care or request the medical provider to place a lien against the property to cover the cost of the care.
To be eligible for Medi-Cal you may reduce your property to the property reserve limit before the end of the month in which you are requesting Medi-Cal. Read the related blog on Medi-Cal For Long-term Care Income Limits for more guidance on Medi-Cal’s financial qualifications.
If you need help with qualifying for Medi-Cal benefits for long-term care, contact us today to schedule your free consultation. We’d love to meet with you!