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Medicare and Medi-Cal are both government health insurance programs; however, there are some significant differences between them.
A LOOK AT THE DIFFERENCES BETWEEN MEDI-CAL AND MEDICARE Medicare and Medi-Cal are Both Government Health Insurance Programs; However, there are Some Significant Differences Between Them ROY W. LITHERLAND CAMPBELL CA ESTATE PLANNING ATTORNEY Elder care attorneys assist people who are planning ahead for the eventualities of aging. When you are engaged in this type of planning, you should understand a bit about Medicare and Medi- Cal. Medicare and Medi-Cal are both government health insurance programs. However, there are some significant differences between ● ● ● them. Let's take a look at these differences. Medi-Cal (Medicaid Need-Based? for the State of Medi-Cal is a program that is available to people who have significant financial need. You cannot qualify for the program if your countable California) is a assets exceed $2,000. program that is When you are considering the possibility of becoming eligible for available to people Medi-Cal, the qualifier “countable” is operative here. Many of the things that you own do not count when Medi-Cal is evaluating your who have significant eligibility status. financial need. You Your home is not considered to be a countable asset. Jewelry, such as cannot qualify for family heirlooms and wedding and engagement rings, would not count. Household items and personal effects are not considered to be the program if your countable by Medi-Cal. countable assets Medicare on the other hand is not a need-based program. When you exceed $2,000. are paying taxes throughout your life, a portion of what you pay is going toward the Medicare program. If your overall contributions ● ● ● meet the requirements, you become eligible for Medicare coverage when you reach the age of eligibility. Even if you are a billionaire, you can still qualify for Medicare. Eligibility Age Another difference between Medicare and Medi-Cal would be age requirements. There is no particular age requirement if you are seeking Medi-Cal assistance. It is all about financial need. Medicare is a program that is specifically designed to provide health insurance to senior citizens. At the current time, the age of Medicare eligibility is 65. As you are planning ahead for retirement you should recognize the ● ● ● fact that the age of Medicare eligibility is subject to change. Lawmakers have consistently floated the idea of raising the eligibility Medicare is a age. program that is This is due to the fact that people are looking for ways to reduce the specifically designed federal deficit. If the age of Medicare eligibility was raised, a to provide health significant amount of money would be saved. insurance to senior citizens. At the Long-Term Care current time the age From an elder law perspective, the biggest difference between of Medicare eligibility Medi-Cal and Medicare is long-term care coverage. Medicare will pay for up to 100 days of convalescent care after surgery. The is 65. program will not pay for custodial care. In other words, Medicare will ● ● ● not pay for an extended stay in a nursing home or assisted living community. Medi-Cal will assist with long-term care costs if you can qualify for the program. This is why Medi-Cal is relevant to senior citizens who are eligible for Medicare coverage. It is not easy for the ordinary American to pay for long-term care out-of-pocket. In the state of California the average annual charge for nursing home care exceeds $100,000 according to the 2012 MetLife Mature Market Institute survey. The average length of stay is right around two years and three months. Ten percent of nursing home residents remain in the facilities for at least five years. . FREE ELDER LAW REPORT When you look at these annual surveys, you find that long-term care costs have been rising by a few percentage points each year. As a result, if you are a middle-aged individual preparing for the future your long-term care costs may be considerably higher than they are today. How likely is it that you will actually need long-term care eventually? The answer is that it is more likely than not. Most people will need assistance with their activities of daily living at some point in time. Medi-Cal Planning Even though there are low upper asset limits, it is possible to qualify for Medi-Cal while retaining a significant store of assets for the well- Protect Your Assets and Preserve Your being of your family members. The key is to plan ahead well in Legacy With a Medicaid Plan advance, because there is a look back period. Learn How to Plan for Medicaid Eligibility If you give away assess just prior to applying for Medi-Cal you are Download Your Free penalized. The exact duration of the look back period has traditionally Report Today been 30 months in the state of California. The federal look back period is five years. California is going to convert to the five-year look back Medicaid (Medi-Cal in California) is a government funded program that period in the near future. provide financial assistance for seniors that need help paying for healthcare Conclusion services such as a nursing home. People must meet certain criteria in To summarize, Medi-Cal is a need-based program, and Medicare is order to receive Medicaid. In some not. Medicare is specifically designed for senior citizens, but Medi-Cal cases, trying to meet eligibility for is available to people of all ages. Medicaid can leave a person with nothing, often having to deplete their net worth, or give assets away in order Medicare will not pay for long-term care, but Medi-Cal will assist with to qualify for Medicaid. But with a these expenses. This is why Medi-Cal planning is important for many little Medicaid Planning, you can use senior citizens. this government benefit and still retain your estate. The Medi-Cal rules and regulations are rather complex, and they are ABOUT THE AUTHOR always subject to change. The best way to proceed when you are ROY W. LITHERLAND interested in obtaining Medi-Cal eligibility would be to retain the services of a licensed California elder care attorney. Your lawyer will ask you a series of relevant questions, and he or she will evaluate your financial situation. Ultimately, you and your attorney will craft a plan that leads to Medi-Cal eligibility while allowing your family to retain a maximum store of financial resources. Roy Litherland has been providing legal services in Santa Clara and Santa Cruz References Counties continuously since 1975. Roy has an undergraduate degree in Medicare accounting from Indiana State University, and a Juris Doctor degree from Indiana http://www.medicare.gov/ University, where he graduated cum laude and won honors in the areas of income Medicaid taxation and estate and gift taxation. In law school he was a recipient of the Dean Faust Award and received awards and http://www.medicaid.gov/ honors in income taxation and estate and gift taxation. CANHR Roy is certified as a Legal Specialist in http://www.canhr.org/factsheets/medi- Estate Planning, Trust and Probate Law by cal_fs/html/fs_medcal_overview.htm the California State Bar Board of Legal Specialization. 3425 S. Bascom Ave, Suite 240 Campbell, CA 95008 Phone: (408) 356-9200 www.attorneyoffice.com
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