Medi-Cal is the California/United States Federal joint health program for eligible individuals and families with low incomes and resources. It is what they call a means-tested program that is jointly funded by the states and federal government, and is managed by the states. It is the primary program used to help our aging population pay for the cost of long term care.
Let’s take a minute to clear up some confusion about the difference between Medicare and Medi-Cal. The names are very similar, and therein lies the problem!
Medicare is really a federal entitlement program which provides insurance to our older population. It’s health insurance for people 65 or older or people who are under 65 but who have certain disabilitites and people with whats called end stage renal disease.
But suffice it say that they are very very different programs. If your loved one was in the hospital for stroke or heart attack and was discharged to a skilled nursing facility for rehabilitation, Medicare probably will pay for those costs at least for awhile. But with diseases like Alzheimers, and other dementias and for your loved one who needs nursing home care, but they have not been discharged from a hospital, Medicare would not cover those costs. Your “Illness” or “disease” has to be the type treated by Medicare.
So Medicare is an entitlement program-meaning if you are for our purposes over 65 you are entitled to it. Medi-Cal is means tested, meaning you have to meet certain income and asset levels to qualify.
Me On Medi-Cal?
So you may be out there thinking-me on Medi-Cal? It seems like Medi-Cal is only for poor or impoverished people. You might be thinking that I have too many assets or too much income to qualify. The problem is that the statistics show otherwise. I’ve seen statstics that nationwide 45% or more of people who need long term care will rely on Medicaid (Called Medi-Cal in California).
The AARP has reported that ninety percent of nursing home residents will be out of money after only 26 weeks of care and that seventy-eight precent of all nursing home residents are qualifed for Medicaid/Medi-Cal.
So the problem becomes-unless your loved one has great wealth or a very good long-term care insurance policy, most people’s ability to pay privately runs out at some some point, and at what cost? For most, it means that they have depleted their entire life savings, burned through their income and there is nothing left.
It becomes even more dire when there is a spouse involved. Let’s give a quick example. Lets say we are talking about your parents and your father has Alzheimer’s and must go into a nursing home. Now your mom and dad have managed to save a little nest egg, have a home and some social security and pension income.
But they think to themselves-me on Medi-Cal? I can’t qualify. And so they go..paying privately…month after month. With average private pay rates of nursing homes at a staggering $6000 per month or more, they can burn through their savings so quickly. And once its gone its gone. And then who takes care of mom? There is no savings left. What if she needs care but she’s not at the level of needing nursing home care. Perhaps she needs at home care. A family member would have to supplement that.
So there are reasons to try and get your affairs in order early to qualify for Medi-Cal. Medi-Cal for most becomes a necessity whether it’s immediately or down the road. The problem with it being down the road… is that eventually you get down that road.
Whether its 2 weeks from now or two years from now, the end of that road is likely to come-meaning that you may not think you’ll need Medi-Cal now, but you can pay privately for 2 years and burn though $120,000 and guess what? In two years you need to apply for Medi-Cal, and now all the savings is gone
So it is extremely important to plan as early as possible and face these issues head on.
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