Two technical topics today: asset testing and estate recovery in Medi-Cal.
What is “Medi-Cal look-back?”
While the ACA abolished asset testing ($2,000 limit on applicant’s assets, with requirements that consumers must “spend down” to $2,000) for most beneficiaries, they still apply to individuals with disabilities who apply through SSI, those 65 or older, and anyone who utilizes long-term care services such as nursing homes. Individuals in long-term care only must not have transferred assets (e.g. moved money to family members or sold for less than fair market value) within a certain period of time before the eligibility determination, referred to as the “look-back period.”
The time frame for the look-back differs in federal and state law – the Department of Health Care Services has historically used a 30 month period, while federal law calls for a look-back of five years.
If someone did transfer assets during the look-back, they are subject to a waiting period, and are essentially barred from long-term care benefits for the length of time equivalent to the asset transfer divided by a state average cost of care per month. The most recent figure available for the monthly cost of nursing care is $7,628.
Individuals concerned about Medi-Cal look-back or planning for long-term care should consult an attorney.
Who is subject to estate recovery in Medi-Cal, and how does it work?
The Estate Recovery Program, through which the government can recoup the cost of care from a beneficiary’s estate after his/her death, is a common concern amongst individuals eligible for Medi-Cal. Here are the facts:
- Only individuals 55 or older and beneficiaries in long-term care are subject to estate recovery.
- There are numerous exemptions to estate recovery including instances when:
- A spouse is alive (recovery can be made after the death of the spouse)
- Beneficiary had a minor, blind, or disabled child
- There is nothing left in the estate
- Heirs can apply for hardship exemption
- Recovery is limited to the cost of care a beneficiary received, however if the individuals was enrolled in managed care, the PMPM can be collected.
- Upon death of the beneficiary, the State becomes a party in the beneficiaries’ will. The State must split any balance in the estate with any other heirs or individuals bequeathed.
- The State can never seize a beneficiary’s home, but when the property is eventually sold, the State may be entitled to some of the profits. The State can impose a lien on a beneficiary’s home if he/she enters long-term care and does not intend to return home. Liens cannot be placed if a spouse, minor/blind/disabled child, or sibling lives in the home.
- The State does very little actual recovery, because most Medi-Cal beneficiaries have relatively few assets. In 2013, it recovered $59.4 million, about 0.1% of Medi-Cal expenditures.
California Advocates for Nursing Home Reform’s thorough summary of Estate Recovery is a valuable resource for talking about estate recovery with individuals eligible for Medi-Cal. Once again, individuals concerned about estate recovery should consult a lawyer. Finally, the Legislature and the Governor have expressed interest in narrowing the estate recovery eligibility criteria and/or the circumstances in which the State can make a recovery – we will keep you posted on any changes.