What is the Difference Between Medicaid and Medi-Cal in California?

One of the most important aspects of estate planning is creating a plan for long-term care in a nursing home. The majority of elderly California residents will need to live in some type of assisted care facility at some point. Unfortunately, the cost of assisted living and nursing homes continues to increase. Many California families are unable to pay for the high cost of nursing home care. The average monthly cost of living in a nursing home in California is $9,247.  

One of the best ways to plan for nursing home care is to qualify for California’s Medicaid program, which will pay for long-term care in a nursing home. Understanding the Medicaid process and consulting with an attorney is crucial for long-term care planning. When planning for Medicaid coverage, you may be confused about the differences between Medicaid and Medi-Cal. We will explain the differences and discuss which type of benefits you may need.

Is Medi-Cal the Same as Medicaid?

Yes, Medi-Cal is the name for California’s Medicaid benefits program. Medicaid is a federal program administered by the federal government, but the federal government works with each state to offer low-cost health coverage to residents. California’s Medicaid program is known as Medi-Cal. Medi-Cal offers qualifying California residents 21 different managed care plans and the coverage plans available are based on the county in which you live. The state-based Medicaid marketplace is “Covered California.”

The Difference Between Medi-Cal and Medicare

One of the critical differences between Medicaid and Medicare is that Medicaid is only available to low-income people. It is a needs-based program that offers health care assistance to low-income California residents. In most cases, people who qualify for Medicaid are only required to pay a small co-payment to cover their medical expenses. California’s Medicaid Program, Medi-Fal, is run by the state of California and local governments. 

The federal government runs Medicare. Additionally, the eligibility requirements and benefits available are different from state to state with Medicaid because they help administer the program.  Medicare, on the other hand, is administered by the federal government, and recipients are only required to pay a portion of their medical expenses through deductibles. There may be a small monthly premium for non-hospital coverage.

Types of Medicare Coverage

There are two types of Medicare coverage — Part A and Part B. Part A is an insurance plan for receiving care in skilled nursing facilities, hospitals, hospice care, and home health care. Medicare Part B is more similar to a basic health insurance plan. It covers doctor’s visits, hospital care on an outpatient basis, and other types of medical services. Most recipients are not required to pay for Medicare part A.

Who is Eligible for Medicare?

To qualify for Medicare, an individual must be 65 or older, a US citizen, or a permanent resident. Additionally, the person applying for Medicare or his or her spouse must have worked for at least 10 years in a Medicare-covered job. Individuals under the age of 65 with a disability or end-stage renal disease requiring a kidney transplant or dialysis may also qualify for Medicare. Keep in mind that Medicare typically does not cover stays in long-term health facilities such as nursing homes.

Do You Have a Long-Term Care Plan in Place?

It is never too late to begin planning for the future. Most of us who live to old age will need to live in a long-term care facility at some point. Planning for long-term care is the best option. Qualifying for Medicaid is not easy. You will need to prove that you have a meager income and very few assets to qualify.  You cannot have any financial resources over $2,000 to be eligible for Medi-Cal.

The Five-Year Lookback Period

Some people assume that when they need to go into a nursing home, they will be able to give their assets away and qualify for Medicaid. That is not the case, however. Medicaid has a five-year look-back period that helps them avoid giving benefits to people who make fraudulent transfers of their property to qualify for Medicaid. In 2005, Congress passed a federal law that imposes five years of ineligibility for people who transfer assets before qualifying for Medi-Cal. The look-back period begins as soon as you submit your application for Medi-Cal benefits.

In other words, if you give your assets away within five years of applying for Medicaid, they will hold those transfers against you. The timing of your financial transaction is crucial, and the sooner you begin planning for long-term care benefits, the better. Nonetheless, even if you find yourself in an emergency and need to apply for Medi-Cal benefits right away, our experienced estate planning lawyers can still help you protect yourself.

Keep in mind that this five-year look-back period does not apply to everyone who is applying for Medi-Cal. The five-year penalty is only applicable to those who need long-term care in an institutional setting, such as a nursing home, or who receive home health care. If you need hospital care or physician services, you will remain eligible to receive benefits for those services, regardless of any property transfers you have made recently.

Law Offices of Daniel A. Hunt

The Law Offices of Daniel A. Hunt is a California law firm specializing in Estate Planning; Trust Administration & Litigation; Probate; and Conservatorships. We've helped over 10,000 clients find peace of mind. We serve clients throughout the greater Sacramento region and the state of California.