How Medi-Cal Counts to $2,000

One of the topics I repeatedly write about on this blog is qualifying for long-term Medi-Cal. In fact, I even have an entire FAQ about it. As you’ll remember from those posts, you can only qualify for long-term Medi-Cal if your countable assets are worth $2,000 or less. Notice that that limit is on countable assets, not all assets. That’s because Medi-Cal distinguishes between countable assets and exempt assets. Let’s look at that distinction more closely to better understand how Medi-Cal counts to $2,000.

We’ll start with the easy category: countable assets. Unless property is exempt, it is countable. That may sound obvious, but it means that any property that is not specifically exempted from Medi-Cal’s consideration is included by Medi-Cal in counting to the $2,000 limit. Because of this, it’s more important—and more difficult—to understand what property is exempt than what property is countable.

It would be impossible to list every type of exempt property and explain the exceptions that apply to them in a short blog post like this, but I do want to touch on some highlights. As I’ve explained before, exempt property includes a person’s principal residence—that is, the person’s home. The home remains exempt so long as the person receiving long-term care intends to return to it, even if return is unlikely. It also remains exempt for so long as the beneficiary’s spouse or dependent relative continues living in it. If you sell your principal residence, the proceeds from that sale are exempt, but only for a period of six months, and only if you intend to use them to buy a new principal residence.

In addition to your home itself, many of the contents of the home are exempt, too. For example, items used to furnish or equip a home are exempt. Similarly, personal effects such as clothing and jewelry (so long as the jewelry is an heirloom, a wedding or engagement ring, or has a value of less than $100) are exempt. Recreational items (such as TVs, VCRs, and the like), musical instruments, and one motor vehicle used for transportation are all also exempt.

Another major asset that is exempt and that I’ve written about before is an IRA. The principal balance of an IRA is exempt so long as you are taking your minimum required distributions. Likewise, small life insurance policies are also exempt, so long as the combined face value of the policies is less than $1,500.

As I said, this list of exempt property is not exhaustive, and I haven’t even begun to cover the exceptions and special rules that apply. But from this list, you can already see how complicated Medi-Cal’s eligibility criteria are. As you can tell, Medi-Cal doesn’t count to $2,000 the same way that you or I might. That’s why it’s important that you don’t try to apply for long-term Medi-Cal without the help of a knowledgeable and experienced attorney.

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