A Grain of Truth…but…Mostly Myth
1. Myth:
“I have to give away everything I own to get Medi-Cal.”
The Truth:
As of January 1, 2024, Medi-Cal does not count assets when a person is applying for long-term care benefits. The bottom line is you don’t need to be completely without assets to be Medi-Cal eligible
2. Myth:
“I can’t give anything away and get Medi-Cal.”
The Truth:
The Medi-Cal rules provide that a person can be disqualified for giving away property, in some cases. But a lot depends on what is given away, to whom, and when. So, again, it’s complicated. Some asset transfers are not penalized under the Medi-Cal rules. Consult with a lawyer who knows the law.
3. Myth:
“I have to wait 3 years after giving anything away, to get Medi-Cal.”
The Truth:
The disqualification isn’t always 3 years long and sometimes there is no disqualification at all. True, there is a 30 month “lookback” (not 3-years) for some asset transfers under the Medi-Cal rules and this only applies to gifts made before January 1, 2024. This means that the Medi-Cal agency will look back at all transfers of property, including sales for less than market value. For some transfers, the “lookback” actually goes back five years. (Irrevocable Trust). However, the rules penalizing transfers do not apply to all transfers. See #2 above.
4. Myth:
“I can keep all our marital property and my inherited property when my spouse gets Medi-Cal.”
The Truth:
As of January 1, 2024, Medi-Cal does not count assets against a person applying for long-term care benefits. See #1 above.
5. Myth:
“If I put my property into my spouse’s name, I will be eligible for Medi-Cal.”
The Truth:
Medi-Cal no longer counts assets when a person is applying for long-term care benefits.
6. Myth:
“Medicare will cover my nursing home bill.”
The Truth:
Medicare only covers small amount of nursing home care provided in this country. Many older people are surprised to learn this. In general, there are 20 days of full coverage if you go into the nursing home after at least three days in the hospital and are getting skilled care (rehabilitation). Then, if you still need skilled care, you can get up to 80 days of partial coverage from Medicare. After that, you will either pay out-of-pocket, or get Medi-Cal, unless you have private long-term care insurance.
7. Myth:
“If I enter a nursing home as a private pay resident, I must use up my assets before I can get Medi-Cal.”
The Truth:
You are not required to use your assets to private pay for the nursing home care. However, some nursing homes might try to make you believe that you do have to do this. They are paid less under the Medi-Cal program then they collect from private pay patients. Some people seek advice from an elder law attorney to find out how they can become Medi-Cal eligible before having spent a significant part of their assets on the private pay rate.
8. Myth:
“I can only ‘spend-down’ my assets on medical or nursing home bills.”
The Truth:
Since Medi-Cal no longer counts assets when a person is applying for long-term care benefits, there is no longer a need to “spend down” your assets before applying for long-term care benefits.
9. Myth:
“My power-of-attorney automatically has the power to take property out of my name, if I ever need Medi-Cal.”
The Truth:
Your best tool to be able to plan for Medi-Cal eligibility, should you ever need it, is to sign a general, durable power of attorney that includes a “gifting and asset protection” power. Your agent under the power of attorney will only be able to re-title your assets if your power of attorney contains a “power to make gifts and protect your assets”. Most powers of attorney don’t contain this, so you might want to ask your attorney to add the language to a new power of attorney for you or your spouse.
10. Myth:
“All property transfers will cause me to be disqualified from Medi-Cal.”
The Truth:
Not all transfers of property will cause a person to become ineligible for Medi-Cal. Transfer made before January 1, 2024 may result in a look-back penalty. Be sure to discuss this issue with an Elder Law Attorney before applying for Medi-Cal long-term care benefits.
11. Myth:
“I can only give away about $18,000 per person per year (in 2024) under Medi-Cal rules.”
The Truth:
This is a rule under federal estate and gift tax law, not under Medi-Cal law.
12. Myth:
“My income may have to be used to pay my spouse’s nursing home bill.”
The Truth:
This is not true in California or the majority of other state (see the “name on the check rule”).
13. Myth:
“All of my spouse’s income must be used to pay the bill if my spouse is on Medi-Cal in a nursing home.”
The Truth:
The law allows you to keep a portion of your spouse’s income if your income is below certain limits (MMMNA, minimum monthly maintenance needs allowance, for 2025 it is $3,854.00). In addition to this allowance, you may be entitled to a greater allowance if the cost of maintaining your home exceeds a certain amount AND if a state hearing officer or a judge orders a greater allowance.
14. Myth:
“I can hide my assets and get eligible for Medi-Cal.”
The Truth:
Intentional misrepresentation in a Medi-Cal application is a crime and can be costly. The IRS and The Franchise Tax Board shares any information concerning income or assets you have with the county department of social services. You or whoever applied may have to pay Medi-Cal back to avoid prosecution for fraudulent conversion of income and/or assets.
15. Myth:
“Medi-Cal rules that applied to my neighbor when he went in a nursing home will also apply to me.”
The Truth:
Medi-Cal rules change, so don’t count on the law that applied to your neighbor still applying to you. Also, there may have been facts about your neighbor’s situation that you just don’t know, or, is different from your particular circumstances. It’s best to have your situation analyzed by a competent elder law attorney.