5th Feb 2014
Medi-Cal is the name of the California Medicaid Welfare Program that is intended to serve low-income families, senior citizens, persons with disabilities, children in foster care and pregnant women. Since it is a free program, Medi-Cal can especially be helpful to individuals planning for long-term health care in their senior years. If you are concerned with qualifying for Medi-Cal, you should incorporate plans for this into your estate plan. As an estate planning professional in Orange County, I help clients by drafting a Living Trust with provisions that specify availment of Medi-Cal. This is what is known as Medi-Cal planning.
Before you draft a Living Trust, you have to determine if you can qualify for Medi-Cal in the first place. Thanks to the Patient Protection and Affordable Care Act (PPACA), more popularly known as “ObamaCare,” the eligibility threshold to qualify for Medi-Cal has been raised. Families with incomes of as high as 138% of the federal poverty level are now qualified for Medi-Cal. That refers to an individual with an income of $15,856 or lower.
The minimum income cited above still excludes many Californians from qualifying for Medi-Cal. Another option is to choose plans under Covered California, the state’s healthcare site for affordable, low-cost and no-cost health care. This option is open to individuals with higher income or small businesses.
A third option to qualify for Medi-Cal is through the purchase, transfer, conversion or liquidation of your assets so you can pass through the program’s stringent income requirements. This then is where Medi-Cal planning comes into play.
Medi-Cal planning begins with the drafting of a Living Trust which will include specific provisions for Medi-Cal. Besides the provisions for Medi-Cal, you have to include a lengthy Power of Attorney that will empower your Trustee or agent to execute a number of strategies and actions which can benefit you the most.
When preparing your Living Trust, you have to work closely with an estate planning lawyer given the complexity of Medi-Cal rules, which are amended every year. An erroneous or inappropriate transfer of assets may lead to a term of ineligibility of up to five years – something that you wouldn’t want to happen. A properly executed Living Trust with the special Medi-Cal language will mean that you can enjoy low-cost or even free health care coverage in your senior years.
You may be able to afford private health care at this time in your life. However, as an estate planning professional in Orange County, I always suggest to have all options available to you by drafting a Living Trust with language specific to Medi-Cal. This way you can be sure you will have health care during your senior years.