Despite the fact that you planned ahead, you find yourself in need of help paying for long term care. The options are limited, but may include Medicaid or Veterans Benefits of Aid & Attendance Pension. For eligibility purposes, the government will determine whether you qualify for the benefit based on the amount of assets and income in your estate. Also, they may look at whether you have transferred assets out of your estate in order to qualify.
General Info – In California our version of Medicaid is called Medi-Cal, which is a government health program for certain people and families with low incomes and limited resources. It is a means tested program and is jointly funded by state and federal governments and managed by the state. As each state moves towards the federal norm, changes will come to Medi-Cal.
Assets and Transfers – If a Medi-Cal applicant’s property and assets are over the Medi-Cal property limit, the applicant will not be eligible for Medi-Cal unless they lower their property and asset levels. But Medi-Cal will also consider the nature and amount of assets transferred out of a person’s estate. The term transfer means an outright gift or a sale made at less than fair market value. If such a transfer of property is made, Medi-Cal may calculate the period of ineligibility for nursing facility level of care.
Look Back Period – The current look back period for asset transfers for Medi-Cal is 30 months. However, the Deficit Reduction Act of 2005 changed the look back period to 5 years, which will soon be implemented in California.
Penalty – The length of the ineligibility period is based on the net fair market value of transferred property which would have resulted in excess property, had an application for Medi-Cal been submitted at the time of the transfer and the property retained by the Medi-Cal applicant. The amount of excess property is divided by the monthly average of private nursing facility cost by County.
General Info – The Aid and Attendance pension is a benefit paid by Veterans Affairs to qualified veterans, veteran spouses and surviving spouses to help pay for long term care. It is a non-service connected disability benefit, to aid a qualified person who requires assistance with 2 or more Activities of Daily Living.
Assets and Transfers – The VA looks at the amount of assets and income of a veteran and their spouses to determine eligibility. In order to receive the maximum amount of the benefit the claimant’s unreimbursed medical expenses must exceed their income. And the assets held by the Veteran or Spouse must be of an exempt status, such as the primary residence, car, etc.
Look Back Period – Currently there is no look back period for the Aid and Attendance Benefit. However this is soon going to change. Senators and the Veteran's Administration are introducing legislation intended to require a three year lookback period for applicants applying for the Aid and Attendance program.
There are a number of effective planning techniques that can be put in place to protect assets from being counted against an applicant and reducing the liability of those assets. It is important to note that actions that are taken on behalf of someone for Veterans Benefits may impact Medi-Cal eligibility. You will want to work with a qualified attorney who can explain the consequences of your choices and help you weigh the alternatives.