Case Examples

Avoiding Disqualification

Don and Carol owned a home as joint tenants worth $500,000 and a $90,000 bank account. Don became a Medi-Cal beneficiary 6 months ago when he suffered a stroke that paralyzed most of his body. When his wife filled out the Medi-Cal application, she did not indicate Don’s intent to return home since Don was so severely disabled and the doctors told her that Don would never recover. This had no impact on Don’s eligibility however, because the house was an exempt asset since Carol lived there and the $90,000 was exempt as the Community Spouse Resource Allowance (CSRA). However, when Carol died suddenly, without a will, Don inherited the home and the money in the bank. This disqualified him from Medi-Cal and he was stuck paying for his own medical care. To top things off, the skilled nursing facility charged Don more than they had charged him when he was receiving Medi-Cal benefits because he was now paying at the “private pay” rate and not the lower Medi-Cal rate.

Don would still be receiving Medi-Cal benefits today if Carol had consulted an elder law attorney. An elder law attorney would have told Carol to make sure that she checked the box that expressed Don's intent to return home on Don’s Medi-Cal application, which would have been permissible even if Don could not return home. If she had done this when Don first applied, or if Don or someone on Don’s behalf had immediately notified the eligibility worker of Don’s subjective intent to return home after his wife died, the house would still have been considered an exempt asset and the inheritance of the house alone would not have disqualified him from receiving benefits. As for the $90,000 in the bank, which would have been exempt as the CSRA while Carol was alive, and Carol's one-half interest in the home, an elder law attorney would have advised Carol at a minimum to record a document that would sever the right of survivorship inherent in the joint tenancy by recording a special document against the title of the home and to create a will or living trust that left her one-half interest in the home and all the money to their children, instead of to Don. This would have prevented Don from inheriting the $90,000 that would now have to be spent for Don’s nursing home care before he could reapply for Medi-Cal. Had Carol followed the advice of an elder law attorney, Don would still be receiving Medi-Cal benefits today and his eligibility would not have been affected by the death of his wife. However, additional Medi-Cal planning would be necessary to avoid the state’s recovery claim against Don's one-half interest in the house after his death.

For more information on Medi-Cal eligibility click here.