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Photograph by Jacqueline Ramseyer
Serving the Elderly: Cedar Crest administrator Jim Geddle and nursing director Kathy Chao stand in the Sunnyvale facility's newly remodeled rehabilitation center.
Most in nursing homes get help with the costs
By Rita Baum
Older people dread the thought of someday needing nursing home care, not only because of their aversion to the institutional living environment, but also because they fear the cost would deplete their hard-earned assets and leave nothing for their heirs. California nursing homes grossed $4.5 billion in 2000, but all that revenue did not come from the pockets of private self-pay residents.
The lion's share, 65 percent, was paid by Medi-Cal at $130 per patient-day, 7 percent by Medicare at $165 per day, 8 percent by managed care and others at $158 per day, and only 20 percent by private self-pay individuals at $138 per day. For a self-paying resident, the cost for nursing home care in Santa Clara County ranges from $3,300 to $7,000 per month, depending on the facility and whether the room is private or shared with one or more residents.
Seniors who own a house that's paid for or nearly paid for, have a car or two in the garage and some savings or pension plus Social Security income generally do not consider themselves eligible for Medi-Cal benefits, but in fact many are. To be eligible for Medi-Cal assistance for nursing home care, the applicant must meet the real and personal property requirements. If assets are over the limit, the applicant will not receive Medi-Cal unless assets are lowered according to program rules; but it may not be necessary to deplete all resources, such as a house and savings, before Medi-Cal might help pay for all or some costs.
An unmarried person at risk of needing nursing home care is financially eligible for Medi-Cal benefits if he or she has $2,000 or less in available resources. A home is an exempt resource and is not considered against the resource limit, as long as the resident states on the Medi-Cal application that he or she intends to return home or a dependent relative is living in the home.
Some personal property is also exempt, such as household furnishings, burial plots, jewelry and one car. The principal on a Medi-Cal beneficiary's Individual Retirement Account (IRA) is exempt if the resident is already receiving disbursements but the income must be used to pay nursing home costs before Medi-Cal will pay the balance. Certain types of annuities may be exempt, but check with a financial planner who is knowledgeable about Medi-Cal before investing in one. An unmarried low-income person who is living with a child or other relative will qualify for Medi-Cal based on his or her own assets, not the relative's.
In the case of a married couple with one spouse living in a nursing facility, the Medi-Cal program may pay some or all of the nursing facility costs as long as the couple together does not have more than $89,280 in available assets. As with a single person, the couple's home is exempt and will not be counted as long as the non-institutionalized spouse (also called community spouse or at-home spouse) or a dependent relative lives in the home, or if the nursing home resident intends to return to the home.
The spouse living in the nursing facility can spend down assets to qualify for Medi-Cal help and can transfer his or her share of property ownership to the at-home spouse or other qualified donee. The signer must be competent to make the decision at the time of the transfer, and the transfer must be done according to Medi-Cal's acceptable process. Usually the beneficiary will pay a share of costs. If the nursing home resident has long-term care insurance or supplemental health insurance, this will be used first, with Medi-Cal paying the balance.
The spouse living at home is allowed to keep assets valued at $89,280 or more, depending on the situation, as well as all of his or her own property, IRA, pension, income and earnings. If the at-home spouse receives less than $2,232 in monthly income, the long-term care spouse can allocate some of his income to the community spouse to make up the difference. There is a process by which the property allowance or the income allocation of the community spouse can be increased if a need is established.
Theresa Nelson, assistant social services program manager, cautions, "The transfer of property and assets and the purchase of an annuity must be done correctly to be considered legal for Medi-Cal eligibility purposes."
Financial planners and attorneys should be selected for their expertise in Medi-Cal. "Couples have come in after spending $10,000 on a financial planner to set up their estate to make it Medi-Cal eligible in case needed, but they learn when they apply that it was not done according to acceptable Medi-Cal requirements," says Nelson.
Individuals and couples may request an assessment of their property by completing an application and making an appointment for a meeting with a Medi-Cal long-term care eligibility worker at the County Assistance Application Center. Program staff admit that Medi-Cal rules are complex, but they can help make the process easier for applicants.
Surviving family members are often faced with an unexpected bill after the death of a Medi-Cal beneficiary and his or her at-home spouse. As a prominent local elder law attorney explains it: "The state has a right to request reimbursement for medical costs paid on behalf of a beneficiary both for nursing home stays at any age and for Medi-Cal assistance paid for hospital or home-based medical services after age 55. Such claims may be reduced if it can be demonstrated that a substantial hardship is created for the heirs."
According to Pat McGinnis, executive director of California Advocates for Nursing Home Reform (CANHR), hardship waivers are rarely granted to heirs. A federal government review of California's Recovery Unit found that in a 15-month period only 12 hardship waivers were granted out of 14,000 estate claims. McGinnis claims that Senate Bill 285, which failed to pass in the Senate on Jan. 31, would have changed that situation. "It would not have ended recovery," she says, "but would provide a fairer program that does not punish the many care-giving children of deceased Medi-Cal residents and their spouses." CANHR introduced an amended version of the bill in February's SB1598.
There is some encouraging news in all this. Only 5 percent of people over age 65 live in a nursing home, and recent long-term care data also sheds some bright light: 72 percent of nursing home discharges occur less than three months after admission and 88 percent occur within 12 months of admission.
Rita Baum is a frequent contributor to the Willow Glen Resident. She has a master's degree in gerontology and has worked in the field of aging for more than 20 years.
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Willow Glen, California Since 1992
