Medi-Cal Income Planning (For At-Home Spouse)
Thompson Von Tungeln works with clients to create Medi-Cal Long Term Care income eligibility plan for the person who has a spouse at home. Our team develops legal solutions that allow clients to keep as much of the current income as possible for the use of the at-home spouse.
Medi-Cal Long Term Care Limits on Income
- No limit on Income to Qualify. Medi-Cal eligibility is based on the value of your "countable" assets, not the amount of income. Even a person with a very high income can qualify for Medi-Cal Long Term Care if their countable assets are below the minimum.
Limits on the Income an Ill Person Can Keep - Under Medi-Cal, the basic rule is that an ill person may only keep $35 of income each month for personal needs, and can only use extra income to pay for:
- Uncovered medical costs, including medical insurance premiums and therapy ordered by a doctor but not covered by Medi-Cal
- The cost of a private room if the ill person pays for the entire nursing home cost, and Medi-Cal is only required to cover medical costs
- Income for an at-home spouse in the amount needed to bring them up to the legal minimum ($2,739 in 2010)
- Support for a dependent child living at home, with the amount set by law
- Certain expenses for rental property belonging to the ill person
The ill person's remaining income must be paid as a "share of costs" to help cover medical and nursing home expense. Medi-Cal will then pay the uncovered amount and will also pay Medicare Part B premiums. If the ill person's extra income is more than the total bills for the month, Medi-Cal will not pay. Medi-Cal also considers extra income to be a "countable asset" that must be paid toward the nursing home or medical bills in the following month or months before Medi-Cal will pay.
- Minimum Income for At-Home Spouse - An at-home spouse is entitled to keep at least the legal minimum of income ($2,739 for 2010) for their own use. All of the at-home spouse's separate income is counted, and if it does not reach the minimum, the at-home spouse may keep enough of the ill spouse's income to make up the difference.
- Keeping Extra Countable Assets to Generate Income - If the income of the at-home spouse and ill spouse together is still less than the legal minimum, the court can be petitioned to let the at-home spouse keep enough extra "countable" assets beyond the amount Medi-Cal normally permits ($109,560 in 2010) if those assets will generate interest or dividends that will help make up the difference. If the at-home spouse has expenses higher than the legal minimum (for example, because of their own poor health), we can petition the court to authorize the at-home spouse to keep enough extra "countable" assets to meet those expenses.
- Keeping Extra Income. If the at-home spouse has health-care or other necessary expenses that require additional income above the legal minimum, the court can be petitioned to authorize the at-home spouse to keep more of the ill spouse's income to meet those necessary expenses.
- At-Home Spouse Keeps Own Income & Any Assets Later Obtained - The at-home spouse may keep all income where the check is in their name alone, so long as they earned it themselves or it was paid from assets that belong exclusively to them and not to the ill spouse. The at-home spouse may also acquire liquid or "countable assets"- by inheritance, gift, or earnings - after the ill spouse is on Medi-Cal without impacting the ill spouse's Medi-Cal situation.
- Joint Income - When income is paid in both spouse's names, or is paid from an asset where the ill spouse's name is on the title (such as with real estate, or a mutual fund), Medi-Cal will count half of that income as belonging to the ill spouse.
- Living Trust for At-Home Spouse - The at-home spouse may set up a living trust in their own name once the ill spouse's Medi-Cal Application has been granted. However, the ill spouse cannot be a co-owner of the living trust, which is a "countable asset," without losing their Medi-Cal eligibility. The living trust may be set up so that if the at-home spouse dies first, the assets are transferred into a "special needs trust" that benefits the ill spouse without affecting their Medi-Cal eligibility.
Income Eligibility Planning can be a complicated process. Thompson Von Tungeln provides sound legal strategies that help clients to legally protect and maximize income while remaining in compliance with the strict eligibility requirements for Medi-Cal Long Term Care.
Call one of our Long Term Care experts today to begin protecting your assets, income and loved ones.