80% of Californians will need long-term care at some point in their life.
The average cost of nursing home care in California in 2018 is $8400/mo.
The average nursing home stay is 24 months.
Most middle class families are financially devastated by the costs of long-term care unless they have planned for it. Planning for your possible long-term care can include several options. First, the family may plan simply by saving an incredibly-sized nest egg. Once the family has done this, they are no longer a middle class family. Unfortunately, most families do not start saving in time to cover their long-term care costs. Often other expenses take precedent, such as paying for college for the kids or paying for a disabled child’s extra expenses. Regardless of the reason, most middle class families have not saved sufficiently to pay for their long-term care. Upon realizing they may need it, most don’t have enough time to save enough.
Long-Term Care Planning
The second option in planning for long-term care is Long-Term Care Insurance. The purchase of this type of insurance does provide some peace of mind. However, the consumer should be clear on what their policy covers. Many long-term care insurance policies include high deductibles, only pay for a short period of care or only pay a certain dollar amount leaving the consumer to pay the balance. Know what your policy includes so you are prepared.
The third option for paying for long-term care is to do estate planning with an attorney knowledgeable in benefits that will pay for it, such as Medi-Cal or Veterans benefits. A combination of all three of these techniques (i.e. saving, long-term care insurance and estate planning) is often employed as the most efficient plan.
Frequently Asked Questions about Medi-Cal Planning & Long Term Care Planning
What is Medi-Cal? Is it the same thing as Medicare?
Medi-Cal is a needs-based benefit funded by the Federal and State governments that pays for certain medical care. It is not the same thing as Medicare. Medicare is a federally-funded insurance program and eligibility for Medicare is based on age and/or disability alone, not financial status.
Doesn’t Medicare pay for the costs of a Nursing Home if it’s needed?
Medicare will pay for up to 100 days of needed Nursing Home care if the care received meets the level of “skilled nursing care.” An average stay at a Nursing Home using Medicare is under 24 days. Medicare is not a way to pay for the astronomical costs associated with long-term care received at a Nursing Home. On the other hand, Medi-Cal will cover the costs of a Nursing Home for its recipients.
What are the requirements for receiving Medi-Cal?
In order to receive Medi-Cal to cover your Nursing Home costs, you must meet the following criteria:
1. Be 65 or older; OR
2. Blind or disabled;
3. Need skilled care;
4. Have no more than $2,000 in assets (excluding exempt assets) if single; or
5. Have no more than $115,920 in assets (excluding exempt assets) if married.
I have more than the maximum assets allowed and am not eligible to receive the Medi-Cal benefit. Do I have to spend down all my assets in order to qualify for the benefit or are there other options?
An Elder Law attorney skilled in Medi-Cal benefits can help you in planning to become eligible for Medi-Cal. If done properly, you will qualify for Medi-Cal, allowing Medi-Cal to pay for your nursing home expense, while reserving some or all of your assets to supplement your care while in the nursing home. This allows your family to use your hard-earned money on things that Medi-Cal will not pay, such as a care manager, certain therapies not covered by Medi-Cal or your insurance, as well as medical equipment that you might benefit from but you otherwise wouldn’t be able to afford. If you spend all your money and then qualify for Medi-Cal when you are impoverished, you have no way to supplement these expenses and your quality of life suffers.
What is Medi-Cal “recovery”?
When Medi-Cal pays out benefits, the amount paid (after age 55) is tracked. When the recipient passes away, Medi-Cal is required to try to “recover” the amount paid out through the deceased’s estate. An Elder Law attorney versed in Medi-Cal can assist in preventing or minimizing this “recovery,” and preserve assets to pass to your family.