We've previously gone over what happens when someone over the age of 65 goes from the hospital to a rehab facility and also directly from home to a skilled nursing facility. We covered how and who pays for what services and for how long.
Let's talk about your payment choices once Medicare and Medicare supplement coverage runs out. As we learned, Medicare does not pay for long-term nursing home care. Your three choices are: 1. write a check each month to the nursing home for $6,000 or more (called Private Pay), 2. get reimbursed from your long-term care insurance policy, or 3. get qualified for Medi-Cal.
Most people have not planned for a long-term care event and are not prepared to pay the monthly nursing home cost of $6,000 or more. Most would go broke in a short period of time.
Also, it is estimated that 93% of seniors have not purchased long-term care insurance. This leads us to the only alternative left for the average person, getting qualified for Medi-Cal to help pay for the monthly nursing home cost.
There is general Medi-Cal (health insurance) and Medi-Cal for long term care. The qualifications are slightly different. We will be discussing Medi-Cal for nursing home or long term care.
There is much confusion about Medi-Cal and Medicaid. They are the same program but in California, we have to be different so we call Medicaid, Medi-Cal. Medi-Cal is a means entitlement program created by Title XIX of the Social Security Act and is fifty percent funded by the federal government and fifty percent by the State.
Even though our tax dollars fund the program, unlike Social Security, you have to qualify to receive benefits. A nursing home Medi-Cal application is submitted only after someone is actually in a facility. You can gather documents and other materials and prepare the application, but the application is submitted to the county Medi-Cal LTC department only after admittance.
The department has forty five days to determine if you qualify for Medi-Cal benefits. For example, let’s say that your application is submitted June 10, 2010 and your family member was admitted June 1, 2010. The department should have an answer back to you no later than July 25, 2010 and benefits would be retroactive for the entire month of June and July.
There is no “you have been approved” letter that is received. If the application is approved, a Notice of Action form is sent detailing the month from which you are approved and your Share of Cost for the previous months and the subsequent months. The Share of Cost is the amount that the Medi-Cal beneficiary must pay from their own income each month to the nursing home.
Typically this will be the beneficiary’s Social Security or pension income. There is an additional calculation if the Medi-Cal beneficiary is married as the well spouse is allowed to have a minimum monthly income of $2,739. Upon admittance to the facility, most will ask for the monthly private pay rate until the application is approved. Once approved, the facility will refund or credit any over payment above the Share of Cost.
Every year there after, the department will require an Annual Redetermination of Benefits. The redetermination process is not as paper intensive as the original application process but can be troublesome if you are not prepared for it.
After the original application is approved, there are post approval requirements that must be met within ninety days if the Medi-Cal beneficiary is married. This is also the time to consider Recovery Avoidance strategies as well as establish new estate planning documents.
Karl Kim, CFP® , CLTC is the President of Retirement Planning Advisors, Inc. and is located in La Mirada, CA. Mr. Kim is a Medi-Cal Specialist and has been submitting applications for over twenty years. He may be reached at 714-994-0599.
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