The problem with failing to plan ahead for Medi-Cal as you age

The problem with failing to plan ahead for Medi-Cal as you age

| Jul 6, 2021 | Estate Planning

Medicare is available for almost all adults over the age of retirement, so man people just assume they won’t need Medi-Cal (the Medicaid program in California) to protect themselves as they age. However, Medicare is a program with substantial gaps in coverage.

The longer someone stays retired without income and the more their medical conditions progress, the greater the risk is that Medicare will no longer cover their costs. Many older adults who need Medi-Cal benefits wait until they have costs Medicare won’t cover to plan for those benefits. The problem with that approach is that there is a financial lookback period that affects every application.

How far back will Medi-Cal review your financial records?

Medi-Cal is a need-based program, so applicants have to show both the lack of personal assets and income to qualify. Although your house won’t count against you, most other property you own will. If you try to diminish your holdings by giving away property to your loved ones or moving them into a trust, the state will very likely penalize you if you do that within 30 months of your application.

The look-back period in California is only 30 months, which is half of the 60 months used in most states. Someone will have to have made transfers or gifts at least two-and-a-half years before their Medi-Cal application for those transfers to not count against them and result in a penalty.

Rather than not getting benefits in a moment of crisis, it is better to plan ahead for benefits you may never need. Doing so not only protects you but also the legacy you would leave to your loved ones, as recovery could put even your home at risk of seizure to repay the benefits you receive.

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