Effective Jan. 1, 2024, California Medicaid (Medi-Cal) is completely eliminating the asset limit. This means that all applicants, including those applying for long-term care, will have their financial eligibility determined strictly on income. At first glance, one would think this would simplify the application process and eliminate the need for Medi-Cal Planning. However, a deeper analysis reveals new bottlenecks and challenges for applicants and instead reinforces the need for application support and Medi-Cal planning expertise. Note that the asset limit remains in place for Supplemental Security Income (SSI).
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Medi-Cal will no longer consider the value of an applicant?s assets when applying for Medicaid long term care. Presumably this means there is no reason to continue the 30 month look-back into financial transactions. Medicaid penalties for look-back violations will go away. The Community Spouse Resource Allowance will be obsolete. As will the need for the Medicaid-Compliant Annuities, Irrevocable Funeral Trusts, Medicaid Divorce and other Medi-Cal Planning techniques used to lower one?s countable assets. Worth noting, DHCS is still finalizing their guidance on transfer of assets and penalties, trusts, and interest & dividend income and will publish these letters within the next several weeks.
What?s Not Changing
Income limits for Medicaid will still apply. Earned and unearned income, including income generated from property will still be counted towards the income limit. Therefore, Share-of-Cost will still be very relevant for applicants. The Monthly Maintenance Needs Allowance which provides income for a non-applicant spouse will be as critical as ever. Perhaps the biggest non-change is the Estate Recovery Program. Although to say it is not changing might be inaccurate in that, it is presumed that California will become more aggressive in their Estate Recovery efforts as without an asset limit, Medi-Cal beneficiaries likely will have much larger estates from which to recover care costs. However, neither applicants nor beneficiaries will be asked to provide information regarding their assets for the purpose of Estate Recovery. Lastly, the medical criteria for long-term care will remain unchanged.
Confusion Surrounding Changes
With the elimination of the asset limit, there are a lot of moving pieces, undoubtably creating some confusion. On Sept. 2nd, 2023, CANHR (California Advocates for Nursing Home Reform) reported that some Medi-Cal applicants have been told by nursing home staff and County eligibility workers that the removal of the asset limit does not apply to Medi-Cal Nursing Home applicants. This is not true, and misinformation can result in the spending down of assets when not necessary.
SSI (Supplemental Security Income) will still have an asset limit of $2,000 for an individual and $3,000 for a couple. While Medi-Cal applicants could keep additional assets and qualify based on income eligibility, they would lose their SSI benefits if their assets were above SSI?s limit.
Projected 2024 Medi-Cal Eligibility Criteria
We want to emphasize that these are projected limits. We will send the actual limits as soon as that data becomes available.
? FPL Income Limits ? We do not have projected FPL limits for 2024. These figures are generally released and effective mid-late January. While CA uses 138% of the FPL as the income limit for Medicaid Waiver programs, the income limit associated with the 2024 FPL will not be implemented until April of 2024. Currently, the income limit is $1,677 / month for an individual and $2,269 / month for a couple with both spouses as applicants. Note that there is no income limit for Nursing Home Medi-Cal. However, nearly all of one?s income must go towards nursing home costs.
? Assets Limits ? California will have no asset limits.
? Monthly Maintenance Needs Allowance ? This is projected to be $3,853 / month.
? Community Spouse Resource Allowance ? This will no longer be relevant.
? Home Equity Limit ? California will continue to have no home equity limit.
Implications for Applicants
? Increased applicants means longer application processing times. California residents who within 6 months of the asset elimination date (1/1/24) were determined Medi-Cal ineligible due to excess assets will be contacted by letter to reapply. Furthermore, many who have never applied, will apply with the elimination of the asset limit. Despite the law giving Medi-Cal offices 45 days to determine eligibility (or 90 days in the case of a disability), we are already seeing delays due to the post-Covid, Medicaid unwinding and redeterminations surge. Given the massive increase in workload for Medi-Cal office staff, it happens that applications will be marked as incomplete in order to meet the deadlines when they are in fact complete. Thereby putting the responsibility back on the applicant and giving the Medi-Cal office more time.
? Increased applicants means more processing errors. While obviously asset calculation errors will be obsolete without an asset limit, with 1000s of Medi-Cal applications behind us, we typically see 3 other types of errors. All of which we anticipate will increase with the surge.
1. Improper Spousal Monthly Maintenance Needs Allowance Calculations ? Not surprisingly, all these errors seem to short the non-applicant spouse of income instead of giving them too much. In California, the MMNA is already low relative to the high cost of living and any miscalculation can result in Medi-Cal spouses struggling to make ends meet.
2. Share of Cost Calculations – This results in some beneficiaries missing out on Full Medi-Cal benefits, potentially costing thousands of dollars unnecessarily each month. This is especially true with Medi-Cal?s Assisted Living Waiver (ALW) and Multipurpose Senior Services Program (MSSP) Waiver.
3. In-Home Supportive Services Need Calculations – Caseworkers routinely omit essential services or expect an elderly or frail spouse to provide physical labor, which would put them at risk for injury and exhaustion. When In-Home Supportive Services are needed, it is essential that the granted benefits be carefully reviewed. Persons unfamiliar with the program are in a difficult position to do so. Further, given the limited hourly wages offered through IHSS, it is important that the caregiver (which in some cases can be a spouse) receives as many hours as possible to earn a living wage.
? Nursing Home Bed Shortages Exacerbated. Already in California, especially coastal California, the Medicaid nursing home bed shortages are a major challenge for families. It is increasingly common for families to retain and private-pay for Life Care Managers to help locate residences in their preferred geographic areas which are accepting Medi-Cal beneficiaries. With more beneficiaries, we anticipate an increased need for beds especially since the HCBS Waiver enrollment numbers are not increasing corresponding with the projected increase in beneficiaries.
? HCBS Waiver Wait-List Time Increases. With the elimination of asset requirements, there will be more eligible persons and therefore more persons applying for home and community based services. Some Medi-Cal Waivers, especially the Assisted Living Waiver, already have lengthy wait-list times and these waiting times will be exacerbated. Waivers without wait-lists are likely to be forced to initiate them.
? Increased Out-of-State Applicants. Anecdotally, we are already hearing of seniors in the border states of Nevada, Arizona and Oregon with plans to move across state lines to avoid their state?s asset limits or look-back period violations. Intuitively this makes sense. We also expect California residents with aging parents living in other states to move their parents to California to avoid asset limits and preserve wealth for the family on the whole.
Value of Medi-Cal Planners
In addition to the program knowledge and application support which Certified Medicaid Planners provide, there is considerably value in retaining a professional for many other reasons, including but not limited to the following.
? Familiarity with the many nuances and rules surrounding asset elimination and potential implications
? Highly organized application documentation prevents unnecessary delays
? Helping applicants meet Medi-Cals income eligibility requirements
? Reviewing and maximizing allocated care hours and services especially for the In-Home Supportive Services program
? Ensuring spousal income allowance is calculated correctly
? Minimizing applicant out-of-pocket Share of Cost
? Protecting a home and estate from the Medi-Cal Estate Recovery program