The following are the ways to pay for the costs of in-home care, an assisted living facility or a nursing home. The amounts listed have been updated for 2018:
* Long-Term Care Insurance – If you are fortunate enough to have this type of coverage, it may go a long way toward paying the cost of in-home care or a care facility. Unfortunately, long-term care insurance companies are having difficulty making a profit these days. Some have left the market entirely and others have raised their rates. Most people facing a need for long-term care in the near future are not able to qualify for this coverage due to their medical condition.
* Pay with Your Own Funds – This is the method most people choose at first. Private care providers, at $26 per hour, will run $104 per day for only 4 hours per day, which is about $3,120 per month. Assisted living facilities generally charge between $2,800 and $4,500 per month in our area. Skilled nursing facilities are the most expensive. With nursing home bills averaging about $8,000 per month in our area, ($96,000 per year), those who can pay with their own funds usually run out of money before the need for nursing home care ends.
* VA Pension with Aid & Attendance – Wartime veterans can qualify for the VA Non-Service Connected Pension Program. The rates for 2018 are as follows: single veterans can qualify for up to $1,830 per month to pay for assisted living and in-home care. Married veterans can receive up to $2,169 per month, and surviving spouses can qualify for up to $1,176 per month. While these amounts are helpful, they are insufficient to pay the full cost of assisted living or a skilled nursing facility.
* Medi-Cal – The Medi-Cal program will pay the entire cost of a nursing home if certain asset and income tests are met. It will not help pay the cost of assisted living. Limited benefits are available for in-home care through the In-Home Supportive Services Program (“IHSS”).
Medi-Cal is California’s version of the Medicaid program that is funded jointly by the state and federal governments. It is designed to help pay for medical care for low income persons and others with limited resources and high medical bills. Although Medi-Cal recipients often receive Medicare, the Medi-Cal program is not related to the Medicare program.
One of the primary benefits of Medi-Cal is that, unlike Medicare, which only pays for skilled nursing or rehabilitation services for a limited period of time (up to 100 days), the Medi-Cal program will pay for long-term custodial care in a nursing home. Custodial care refers to long-term assistance with two or more of the activities of daily living, i.e., eating, bathing, dressing, walking, toileting, and transferring (which is getting out of a bed or chair).
Here are the numbers for 2018:
Community Spouse Resource Allowance (CSRA), which is the amount the spouse residing at home (i.e., the “community spouse”), can keep in non-exempt resources (not including the family home, one vehicle and retirement accounts, such as IRA’s, 401K’s, etc., in pay-out status):
Minimum Monthly Maintenance Needs Allowance (MMMNA), which is the minimum amount of income that the community spouse is allowed to have:
Average Private Pay Rate (APPR), which is the “penalty divisor” used to calculate penalties for transfers of assets prior to application:
$8,841.00 (amount should increase in April 2019)
The current Medi-Cal regulations allow you to transfer property to individuals or to an irrevocable trust in order to become eligible for Medi-Cal. However, eligibility depends on how much you transfer, when the transfer occurs and whether you are currently residing in, or about to enter, a nursing home. Not all transfers are subject to the transfer rules and not all transfers result in a period of ineligibility. For example, transfers of less than the APPR (above) do not incur a penalty; transfers to a blind or disabled child of any age do not incur a penalty; and transfers of “exempt” assets, (such as the family home), can usually be made provided certain conditions are met.
Because of the complex nature of the transfer regulations, as well as income tax considerations, it is important to seek the assistance of a knowledgeable Elder Law attorney prior to engaging in any Medi-Cal Planning.