Planning for and Understanding Long-term Care … Planning for and Understanding Long-Term Care © 2011, McDowall Cotter, APC December 6, 2011 2 *DISCLAIMER: Nothing in this presentation

Medi-Cal: Planning for and Understanding Long-Term Care

© 2011, McDowall Cotter, APCwww.mcdlawyers.net

December 6, 20111

Medi‐Cal: Planning for and Understanding Long Term CareUnderstanding Long‐Term Care

December 6, 2011



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*DISCLAIMER: Nothing in this presentation should be interpreted as legal advice. This presentation is intended to help a person to understand the area of law to help ask the right questions with the attorney of their choice. Your time to act may be very limited and this could substantially reduce your rights and options. YOU CAN y y g pNOT rely on anything contained here in. This information is not intended to substitute for professional legal advice and does not create an attorney‐client relationship. You should accept legal advice only from a licensed legal professional with whom you have an attorney‐client relationship. You should contact a lawyer in your area immediately, to assist you in any of these matters.

Circular 230 Disclosure: Pursuant to recently‐enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used for the purpose of (i) avoiding tax‐related penalties under theused, for the purpose of (i) avoiding tax related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax‐related matters addressed herein.



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2070 Pioneer Ct.S M t CA 94403

A Common-Sense Approach to the Practice of Law

www.mcdlawyers.net

San Mateo, CA 94403Tel: 650‐572‐7933Fax: 650‐572‐0834

3

y(650) 572-7933



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Jaclyn B. Smith



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di l i lif i ’ di id h l h

MEDI‐CAL: AN OVERVIEW

• Medi‐Cal is California’s Medicaid health care program. This program pays for a variety of medical services for children and adults with limited income and resources.

• It provides coverage to 6.5 million low‐income people in the state.

• Medi‐Cal is a need‐based program and is f d d j i tl ith t t d f d lfunded jointly with state and federal Medicaid Title 19 funds.



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• Medi‐Cal Planning is a systematic approach of helping individuals protect and preserve their assets while still qualifying for Medi‐Cal benefitsCal benefits.

• Medi‐Cal Planning is especially important to married couples who are unable to qualify for long‐term care insurance or who arefor long term care insurance or who are unable to pay the premiums.



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• No two sets of circumstances are identical and the answer to any legal problem may change drastically based on even a slight change in the circumstanceschange in the circumstances.

• Medi‐Cal planning is based on numerous factors and the state of the law at the time that decision is made.



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Where do you want your assets to go?

Family Government



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MEDI‐CAL: THE OLD, THE NEW

TODAY IS TODAY

TOMORROW IS TOMORROW

The rules which govern Medi‐Cal eligibility areThe rules which govern Medi Cal eligibility are complex and are subject to change.



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Th Old I 1993 C d i ifi t


• The Old: In 1993, Congress made significant changes in the eligibility rules for coverage of nursing home care under California’s Medi‐Cal program. These changes were not mandated however California adoptedmandated, however, California adopted some of these changes which are currently applicable. Although subsequent revisions to eligibility rules have been implemented by California, current eligibility is based onby California, current eligibility is based on these old provisions.



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• The New: In 2008, Congress mandated new statutory provisions changing the eligibility rules for coverage of nursing home care. California has published a proposed set ofCalifornia has published a proposed set of provisions that accommodate the mandated changes. California has published proposed changes, however they have not been enacted.



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MEDI‐CAL: TWO DEPARTMENTS

CollectionQualification



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MEDI‐CAL: TWO DEPARTMENTS

• These departments are separate and do not work together.

• The left hand and the right hand may provide for a different approach with the same facts.



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MEDI‐CAL: QUALIFICATION

• Two tests have been developed by Medi‐Cal to determine eligibility to qualify for financial assistance. • Assets and Resource Test

• Income Test

You must pass both tests to qualifyYou must pass both tests to qualify.



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• Exempt Assets: Not counted in determining eligibility



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• Non‐Exempt Assets: Are counted in determining eligibility



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• Assets and Resource Test• For a Single, Widowed or Divorced individual, the resources cannot exceed $2,000.

• Community Spouse Resource Allowance (CSRA) is• Community Spouse Resource Allowance (CSRA) is determined annually.



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• Income Test• There are two approaches for determining income to qualify for financial assistance. • Gross Income Methodology

• Determining Net Countable Income



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MEDI‐CAL: COLLECTION

• Medi‐Cal applicants, beneficiaries and their spouses should always be aware of the Medi‐Cal Recovery rules and plan h d if h idahead if they want to avoid recovery on their home or other assets.



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f h d l b f ’ d h


• After the Medi‐Cal beneficiary’s death, the State can make a claim against the estate of an individual who was 55 years of age or older at the time he or sheof age or older at the time he or she received Medi‐Cal benefits.

• There are limitations in terms of application and how much the State can pprecover.



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• The State can make a claim against property held in a living trust, joint tenancy, tenancies in common or life

l h b fi i ’estate, as long as the beneficiary’s name is still on the property at the time of death.



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• The amount of recovery is limited to the amount of benefits paid or the value of the beneficiary’s estate, whichever is lless.



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• There are some delays to an Estate Claim: • Surviving Spouse

• Minor, Blind or Disabled Child

• An endless delay to an Estate Claim: • Where There is Nothing Left in the Estate



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• Under the current law, the State may make a claim against any real or personal property and other assets in hi h h i di id l h d l l i lwhich the individual had any legal title

at the time of death.



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MEDI‐CAL: SOLUTIONS

• The best way to avoid an Estate Claim is to: • Plan for lifetime long‐term care coverage.

• Plan for a minimum of 5 years for long‐term care coverage.

• Consider transfer strategies so that property is transferred out of the beneficiary’s name during life, maximizing benefits to family members.

• Leave nothing in the estate.



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MEDI‐CAL: SOLUTIONS

• Capital Gains Tax

• Gift Tax

• Income Tax

• Proposition 13, Proposition 58, Real Property Tax

• Control• Control

• Protection and Preservation



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A i l b fit f th h h

THANKS FOR ATTENDING

As a special benefit for those who have attended today we are offering a half hour consultation. There will be a charge of $100 for this appointment which will be credited to your flat fee if you decide to proceedto your flat fee if you decide to proceed

with Medi‐Cal planning.

Please contact our Client Services C di t S l i I t h d lCoordinators, Sylvia or Irene, to schedule an

appointment.



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THANKS FOR ATTENDING

2070 Pioneer Ct.San Mateo, CA 94403Tel: 650‐572‐7933Fax: 650‐572‐0834

www.mcdlawyers.net(650) 572-7933

Documents

Planning for and Understanding Long-term Care … Planning for and Understanding Long-Term Care © 2011, McDowall Cotter, APC December 6, 2011 2 *DISCLAIMER: Nothing in this presentation