As an estate planning attorney, I am sometimes asked to assist an elderly person meet his or her health care needs through public beneﬁts. The rules and regulations regarding public beneﬁts are very complicated and are forever changing. Therefore, I always refer persons seeking this type of assistance to an attorney who specializes in this area. I have found that the terminology alone can be confusing — “Medi” this and “Medi” that. For this reason, I thought it might be useful to share with you some general information concerning these programs.
“Medicare” is a program administered by the federal government. It is an employment-related, public insurance program that is neither need-based nor means-tested. It is linked to Social Security and provides beneﬁts to wage earners who have qualified for the program by payroll tax contributions. Medicare Part A (Hospital Insurance) provides hospital beneﬁts, limited post-hospital skilled nursing facility care, part-time home health services, and hospice care. Medicare Part B (Supplemental Medical Insurance) is a voluntary program of health insurance covering physicians’ services, certain outpatient services, home health care, diagnostic tests, and medical appliances. Though Medicare is an important program, it does not cover the health care many senior citizens have the most need for — long term nursing care.
“Medicaid” is a federal program that enables states to provide medical assistance to impoverished individuals. It is administered by the respective states and goes by different names, according to the state involved. In California, the program is called “Medi-Cal”. Medicaid is a hot topic right now given the Trump administration’s effort to eliminate the Affordable Care Act (“Obamacare”).
An individual’s entitlement to Medi-Cal beneﬁts depends on the ﬁnancial resources available to him or her. Once an individual qualiﬁes, however, the program will cover nearly all medical assistance, including long term nursing care. Given that nursing home costs range from $3,500 to $7,500 per month, it is for this reason that many people are concerned with obtaining Medi-Cal beneﬁ ts. However, since the program is designed to assist only those who are truly impoverished, there are strict limits on the income and assets a person can have.
Under Medi-Cal rules a person is not required to sell his or her residence to qualify for beneﬁts but the State has a claim against the residence for reimbursement of beneﬁts paid that attaches to the residence upon the recipient’s death. There are speciﬁc, narrow exemptions or limitations that apply to eliminate or reduce the right of reimbursement but most estates are impressed with the reimbursement requirement. One very important change to the law as of January 2017 is the elimination of Medi-Cal lien attachment to property held in a living trust! On the other hand, if property is not held in a trust but instead must go through probate, the probate court requires a verified statement regarding whether or not the deceased person was a Medi-Cal recipient and if so will require that Medi-Cal be reimbursed before distribution to heirs can be made. If the estate is distributed without notifying the state or giving the state an opportunity to seek reimbursement, the state can make a claim directly against the heirs of the deceased person that received the property in question!
If the prospect of long term nursing care is a concern, insurance to provide such beneﬁts should be obtained. If the need is imminent, you should seek the counsel of an attorney that specializes in that area of the law.
© 2017 by Marlene S. Cooper. All rights reserved.
(Marlene S. Cooper, a graduate of UCLA, has been an attorney for over 35 years. Her practice is focused entirely on estate planning, estate administration and probate. You may obtain further information at www.marlenecooperlaw. com, by e-mail at Marlene@ MarleneCooperLaw.com, by phone at (626) 791-7530 or toll free at (866) 702-7600. The information in this article is of a general nature and not intended as legal advice. Seek the advice of an attorney before acting or relying upon any information in this article).