Delays in implementing “Senior Penalty” in Medi-Cal

Earlier this year, California residents received good news about effectively ending the “Senior Penalty” in Medi-Cal eligibility rules. The law was due to go into effect on August 1, 2020. Now that date has been delayed to December 1, 2020.

What is “Senior Penalty”? It has to do with the rules and regulations of Medi-Cal. Under the Affordable Care Act, most adult Californians whose income is equal to or lower than 138% of the federal poverty level, can qualify for full Medi-Cal coverage. That income limit is now equal to $1,436 per month for an individual. 

However, applicants over the age of 65 have to apply for Medi-Cal through the Aged & Disabled Program. In order to receive full coverage through that program, the applicant is only allowed to have 123% of the federal poverty level (currently $1, 271/month for an individual). If the applicant’s income is even slightly higher than the limit, they can only qualify for Medi-Cal with a Share of Cost. 

The share such an applicant is required to pay is calculated based on the Maintenance Need Income Level (MNIL). MINL is the amount of money the state considers sufficient for an individual to survive per month. This limit in California is equal to $600 and has not been changed since 1989. The rest of the applicants monthly income becomes the applicant’s share of cost. 

For example, a California resident of the age of 64 with a monthly income of $1320 would qualify for Medi-Cal’s full coverage through the Affordable Care Act. However, only a year later, at the age of 65, that same person would need to apply for Medical through the Aged & Disabled program. Since their monthly income is higher than the lower income limit, they would need to pay $720 out of their every paycheck in order to qualify for Medi-Cal. These regulations force many of our elderly to choose between their day-to-day expenses like rent or food, and adequate healthcare. 

The authorities took notice of the issue and in the summer of 2019, the Governor signed AB 715 into law. The act ends the “Senior Penalty” by raising the income limit in Aged & Disabled Program to 138% of the federal poverty level. This change will make close to 30,000 elderly Californians eligible for Medi-Cal. It is especially important now, during the second wave of the pandemic, when many families find themselves in a difficult financial situation. Unfortunately, the implementation of the law has been moved to December 1 of this year. 

We will monitor the situation closely. We will inform our readers about any changes as soon as they occur.