A nursing home is in fact a home where skilled nursing care, rehabilitative care, medical services, personal care, and recreation is provided in a supervised and safe environment. Finding the right nursing home for a loved one can be a difficult decision. However, family involvement does not end when a loved one moves into a nursing home.  Your family will need to make sure the nursing home’s staff  provides the personalized, good care that your loved one deserves.

Most people know that nursing home care can be expensive. Although the average cost is more than $50,000 a year and climbing, it can vary widely depending on where you live.

According to a recent survey, nursing home costs now average about $168 a day—$61,320 a year¹.  That is about 10% more than two years ago. Nursing home or skilled nursing home expenses can quickly deplete a person’s retirement savings.  Many people over 65 are under the false assumption that Medicare or their HMO will automatically pay for most if not all of their nursing home expenses.  Other people believe that employee health insurance will pay for nursing home care. This simply is not true. Often times these people are surprised to discover they will have to pay the larger portion of these costs out of their own pockets.

About a third of nursing home residents pay all of their nursing home costs from their own funds. Extended nursing home care can deplete your loved one’s savings in as little as six months. Only about 5 percent of all people who eventually need nursing home care have purchased long-term care insurance, which covers the cost of a nursing home or other extended skilled nursing care. Medicare, the federal health insurance program for older people and some younger people with disabilities, only pays for short-term nursing home stays.

About two-thirds of all people who require nursing home care pay for their care with money from Medi-Cal, a state health insurance program for people with low incomes. Medi-Cal picks up the cost of nursing home care once people have used up almost all of their savings—spouses are allowed to keep some assets including income, savings, and their home. However, Medi-Cal will only pay for nursing home care that is provided at a facility certified by the state government.

Finally, please do not confuse Medicare with Medi-Cal. Medicare is a health insurance program and never “takes everything away” from someone who uses it. However, Medicare only pays for short-term skilled nursing care. The Medi-Cal program often pays for long-term nursing home care and may require estate recovery for repayment of this care. But, remember that the spousal impoverishment prevention program may help alleviate some of this concern for your loved one.

Medicare pays for skilled nursing home care. This is not the same as long-term nursing home care. To be eligible for skilled care, the Medicare beneficiary must meet several conditions, including having been hospitalized for at least three consecutive days for a related illness prior to being admitted into a Medicare-approved skilled nursing facility. Medicare pays for the first 20 days of approved stays in a skilled facility, but coverage is limited beyond 20 days.

Individuals who receive long-term care in a nursing home not covered by Medicare must pay the entire cost themselves whether it is from their Social Security check, pension, or savings. If individuals don’t have sufficient income or savings to pay for long-term nursing home costs, they spend down their income, savings, and other assets to help pay for their care until they are eligible for Medicaid, a Public Aid payment source.

Many consumers do not understand that Medicare and Medi-Cal provide only limited financial assistance with long-term care needs.  While Medicare will cover up to 100 days of skilled nursing home care per benefit period, after 20 days beneficiaries must pay a coinsurance fee.  In 2001, that coinsurance fee was about $101.50 per day¹.  Medicaid provides financial assistance for approximately 70% of nursing home residents, but some are required to deplete their assets before the program will pick up the bill for their care.

The cost of nursing homes, long-term care, retirement communities, assisted living facilities and other independent living facilities is extremely variable.  It’s important that you research all of these costs and factor them into your retirement planning and estate planning.   Attorney Judd Matsunaga of Elder Law Services of California is available for a free initial consultation to help you learn more about how you can simultaneously qualify for Medi-Cal to pay for nursing home costs, protect your family’s assets and save the family home having to be sold in the future to pay for the nursing home care received.  Call Elder Law Services today at 1-800 403-6078.

¹ Source: MetLife General News: Press release.

This new Medi-Cal managed-care program, sometimes referred to as “mangled care,” is being implemented by Marin County along with Mendocino and Ventura counties to over 150,000 low-income seniors and the handicapped to save money, under Partnership Health Plan of California (out of Fairfield).

As a consumer advocate and resident of Marin County for over 50 years, I understand the California budget crisis and the increased costs of health care, especially to seniors, disabled and the working poor, along with the unemployed, but something is drastically wrong with our county Board of Supervisors who have been sold this bill of goods under the county Organized Health System Plan.

This new program has been sold to the Board of Supervisors with the following goals and objectives:
This Partnership Health Plan of California (PHC) will improve access to care for all patients.

• The new program will reduce use of emergency rooms for routine care.

• It will improve the quality of care.

• It will run a locally responsive organization in Marin County.

• It will increase provider reimbursements

• It will increase scope of service to the members.

Well, Marin, I will tell you what this program really does and why it should not be implemented over the Fourth of July holiday weekend as it needs to be delayed at least 60-90 days:

• All brand-name prescriptions have to be switched to generics, which is an impossible task, according to Paul Lofholm, PharmD, Ross Valley Pharmacy, Larkspur, over a five-day holiday weekend, especially all 350 diabetes Medi-Cal patients who are on brand-name diabetes drugs being switched to a generic drug and insulin combination. This needs time for change and available physicians.

• All pain meds must be switched to Methadone.

• All diabetes brand names, such as Actose, must be switched to Metformin and insulins.

• Prior authorizations to obtain a brand name Rx from a generic are going to take 48 hours or two days to obtain.

• Physicians who are in the old network are being switched to new physicians in clinics; some of the clinics are a distance away from patients with no transportation.

• Zsuzsanna Biran, pharmacist-owner of West Marin Pharmacy in Pt. Reyes, says the fee on a take-it-or-leave-it basis is $1 plus the cost of the ingredient. The fee for pharmacists used to be $7.23 per prescription plus cost of the ingredients. Marin County has the largest percentage of seniors per capita of all California counties. Reimbursing the pharmacist $1 per prescription will not cover the cost of gasoline for deliveries to seniors with no transportation (the lame, physically challenged, blind). This new program will virtually eliminate free delivery services, as it is illegal to charge for delivery to this population.

• This entire program is being phased in for our 16,000-plus beneficiaries over a Fourth of July holiday weekend with no physicians available on Friday, July 1, or Monday, July 4, making it impossible for patients to get new drugs and see MDs to switch to the generics.

Managed-care program such as Kaiser Permanente’s can do a good job in coordination of care and reducing costs for chronically ill patients, but this new plan needs more than a holiday weekend to be phased into the system.

These patients and customers are not long-haired hippies. They are our seniors and our children, folks like your next-door neighbor who has lot his/her job and needs to depend on the Medi-Cal low-cost health care network to survive. A 60- to 90-day delay of this program will at least give patients time to get new physicians, coordinate their care, get the switching that needs to be done on the new Partnership for Health formulary and have public hearings to be sure availability, accessibility and quality of care are met.

I strongly suggest if we can’t achieve a delay in this program, caregivers and health care providers should call Medi-Cal patients to notify them about the new program and the switch in doctors and prescription medications as of July 1 and load up on their refills, especially patients with chronic care conditions, so they do not run out of their prescription drugs over the Fourth of July weekend.

By: Fred Mayer

Judd Matsunaga of Elder Law Services is a qualified attorney who has helped hundreds of California residents with Medi-Cal Planning.  Mr. Matsunaga can be reached for a free consultation by calling 1-800 403-6078.

A: Medi-Cal Planning is the systematic approach of helping you protect your home and preserve your assets while still qualifying for Medi-Cal benefits. Medi-Cal Planning is especially important to married couples who are unable to qualify for long-term care insurance or who are unable to pay the high premiums. Medi-Cal eligibility is determined by formulas based on the amount of income and resources available to the applicant. Medi-Cal planning involves the purchasing, transferring, conversion and/or liquidation of assets to enable you or your loved one to qualify under Medi-Cal’s test of income and resources.

Due to changes in federal laws enacted in 1996, almost anyone can qualify under Medi-Cal’s eligibility tests by working within the complex rules and regulations of Medi-Cal. Depending on the individual’s specific circumstances and objectives, the details of Medi-Cal Planning may be different from one individual to the next.

The Department of Health Services (DHS) also requires that a Medi-Cal applicant sign a declaration stating that they are aware of the possibility of a “Notice of Spend down”.

The rules which govern Medi-Cal eligibility are complex and change each year. Consulting a qualified Elder Law Attorney before transferring assets is the best course of action to avoid an improper transfer which may result in a period of ineligibility for up to 5 years.

Q: Is our property protected against Medi-Cal claims if all our assets are in a Living Trust?

A: No. A Living Trust does not protect you from Medi-Cal claims. Any non-exempt property owned by your living Trust is subject to Medi-Cal eligibility rules and recovery claims.

Q: How can I protect my assets and still qualify for Medi-Cal?

A: Since a married applicant who requires long-term care is only allowed to keep $2,000, most Medi-Cal plans would involve taking his or her name off of all community property accounts and/or transferring his or her separate accounts to the spouse who is ‘well’. Any excess resources above $2,000 for an individual, or $109,560 for a married couple, may be spent down by purchasing exempt or unavailable assets. Your home can be transferred to anyone of your choosing, not just your spouse, as long as it is an exempt asset at the time of transfer. This should be done as a step-transaction to avoid having the new owners pay unnecessary taxes along and capital gains. It is also possible to transfer income (i.e. pension benefits) to the well spouse.

Q: What is a Durable Power of Attorney?

A: The Durable Power of Attorney is the single most important document for Medi-Cal planning. This document will enable your agent to act on your behalf by implementing Medi-Cal strategies should you or your spouse require long-term nursing care.

Q: If I already have Medicare are my nursing home costs covered?

A: No. Medicare will only pay for skilled nursing care, not “custodial” care. Even then, Medicare usually only pays for the first 20 days. From days 21 through 100, you pay the largest portion of the bill, and after that Medicare stops paying all together.

Q: What assets can I keep while still qualifying for Medi-Cal?

A: You are allowed to keep your home, a car, and all exempt and unavailable assets.

Q: Can I transfer my assets to my family members in order to qualify for Medi-Cal?

A: Assets can be protected, but only in a special way. Medi-Cal has strict rules against improper transfers which result in a period of ineligibility of up to 5 years. Medi-Cal conducts a “look back” to different time periods to determine if any improper transfers have been made. Consult an experienced Medi-Cal Planning Attorney before attempting to transfer assets.

Q: Who can assist me in transferring or passing my assets to my heirs?

A: You should contact an Elder Law Attorney who understands the latest complex Medi-Cal rules and who can help you to both protect and preserve assets while still qualifying for Medi-Cal.

Q: Don’t we have to be living at the poverty level to qualify for Medi-Cal reimbursement of nursing home costs?

A: No. It’s a very common misperception that Medi-Cal is only available to low-income applicants. California residents with substantial assets can qualify for Medi-Cal and have their nursing home paid for by the state if they know how.

Q: Will I have to sell our family home to qualify for Medi-Cal?

A: Your family home is exempt for Medi-Cal eligibility purposes. However, it is most important to know that certain steps must be taken to prevent Medi-Cal from asserting an estate recovery claim against your home to later recover the amount of nursing home bills it paid on your (or your spouse’s) behalf.

Elder Law Services of California has an extensive background in Medi-Cal Planning, Estate Planning and Real Estate Law. They routinely assists those in need of creating or updating their wills, trusts, powers of attorney and other estate planning legal documents. The firm actively keeps their website up-to-date with the latest information and free resources pertaining to Medi-Cal Qualification and Medi-Cal Planning.

Most attorneys know very little about proper asset protection. Asset protection is a complicated specialization which requires that your attorney have in depth knowledge of tax law, trusts, wills, estate planning, corporations, and more.

As part of your search for the right asset protection attorney you should be prepared to ask each candidate the same questions before making a final decision. For example how much experience do they have? How long have they been providing asset protection services and is that what they specialize in? Do they offer a free consultation before you pay anything? Do they know about the latest changes in your state’s tax laws?

These are just a few of the questions you should consider asking when choosing an asset protection attorney. After you’ve narrowed down your choices you should ask the prospective attorney for a free consultation if they haven’t already offered one. This will give you a good idea about what is needed for your situation and how much it will cost to complete a proper asset protection plan.

Remember that only an attorney can provide legal adivce so you probably should not consider hiring an “asset protection specialist who is not also an attorney. Hiring an attorney ensures you of certain privileges like client-attorney confidentiality which is something an asset protection specialist cannot offer.

If you need to know more about how asset protection and estate planning can benefit you and your heirs then ask to speak to attorney Judd Matsunaga at Elder Law Services of California today for a free consultation. Call 1-800 403-6078

Erik O.

J. Heald

G. Bodine