Here’s the situation. Mom, age 86, has been in a nursing home for the past 6 months. She will probably be there for as long as she lives.
The money that she has left is:
1. An IRA with a value of $150,000
2. A certificate of deposit for $40,000
3. $2,000 in her checking account
Her monthly income is $500 from Social Security. The monthly nursing home bill is $6,000.00. Sadly, her daughter has to use $5,500.00 of her mom’s money each month to cover the shortfall.
She takes the money each month from the IRA because it is liquid and she doesn’t want to break the CD.
Is this the right thing to do?
Here’s why. Mom’s IRA money doesn’t count as an asset when the time comes to apply for Medi-Cal (also known as California Medicaid). This is what most people do because they mistakenly think that the IRA counts for long term care California Medicaid eligibility.
The money in her checking account and CD, however, are countable. So it makes sense to use those funds first and get her qualified sooner. These funds could eventually go to mom’s beneficiaries rather than the nursing home.
Friends, what you need to know is that for Medicaid California eligibility, some things count (Countable Assets) and some things don’t (Unavailable or Exempt Assets).
Qualification is based on how much you have in Countable Assets only.
A single person can have up to $2,000 in Countable Assets. A married couple can have up to $111,560. Why such a big difference?
The government says that if a single person is on California Medicaid, and everything is being paid for, why does this person need to have any money.
On the other hand, if one spouse is in a nursing home and the other is at home, the spouse at home needs to pay the bills. So the government allows the spouse at home to have assets to maintain their standard of living.
California Medicaid for long term care is a quirky system and you need to know the rules. That’s why I’m here to be your translator. Let’s work together to get your family member through the bureaucracy.
Karl Kim is a Certified Financial Planner™, Certified in Long-Term Care, and the President of Retirement Planning Advisors, Inc. in La Mirada, CA. He is a Medi-Cal Specialist and has submitted over 1000 applications with a 99.9% success rate over the past 20 years. He can be reached at 714-994-0599.
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