Medi-Cal Nursing Home Care Update: January 1, 2008 Key Numbers

Spousal Protection Amounts
The Medi-Cal rules provide special help when one spouse needs care in a nursing home and the other spouse is healthy enough to remain at home. These rules are called the "spousal protections." They were designed so that care for one spouse would not impoverish the other, who needs to keep up the home and live in the community. Under the spousal protections, effective January 1, 2008 the healthy spouse ("at-home spouse") can retain at least $104,400 of countable assets.

The Medi-Cal rules also allow an at-home spouse to keep additional countable assets if the at-home spouse's monthly income is low (under $2,610, effective January 1, 2008). In that situation, Medi-Cal has allowed the at-home spouse to retain additional assets above the $104,400 - to invest and bring his or her income up. This is especially important in cases where income of the nursing home spouse will stop at that spouse's death.

For example, let's say that Eleanor (the at-home spouse) has monthly income of $1,000. Her husband Franklin (the nursing home spouse) has monthly income of $1,800. Medi-Cal would allow Eleanor to ignore Franklin's income, and keep additional assets and invest them to bring her monthly income up to $2,610. If Eleanor had $300,000 to invest, and she invested it in CDs at 4%, it would produce $1,000 per month of income for her. Her monthly income would jump to $2,000 - still within the allowed $2,610. To keep such additional assets, Eleanor would need to file a court petition. Note: if Franklin's monthly income were less than $1,610, Eleanor would be able to retain a portion of the additional assets through a fair hearing (an internal Medi-Cal appeal process) instead of having to go to court.

Warning: As we've discussed elsewhere, these rules are in the process of being changed.

Private Pay Rate / Ineligibility Calculations
Under the Medi-Cal rules, certain gifts are penalized by levying months of ineligibility. The calculation is made by dividing the dollar value of the gift by the official statewide monthly average private pay rate (APPR) for nursing home care in California. The APPR amount is published annually by the Department of Health Care Services. As of January 1, 2008, the APPR is $5,101.

For example, let's say that Mrs. Moses had $32,000 of countable assets on January 1, 2007. She gave $30,000 in cash to her nephew on January 15, 2007; she has made no other transfers. One year later (January 15, 2008), Mrs. Moses needed nursing home care, and had only $2,000 of countable assets. She applied for Medi-Cal. In her application, Mrs. Moses disclosed the $30,000 gift. Because of the gift, Mrs. Moses became ineligible for Medi-Cal for five months ($30,000 divided by $5,101 equals 5.88, rounded down by Medi-Cal to 5.0). Her ineligibility period began with the month in which she made the gift (January 2007) and lasted for five months (through May 2007).

Warning: As we've discussed elsewhere, the penalty rules are in the process of being changed, and drastically so!