Last August, we published a blog about California’s new Medicaid eligibility rules. Well, those new rules are coming to fruition and will drastically change Medicaid planning in that state.
Most states have a $2,000 asset limit for an individual to qualify for Medicaid. California was no exception. However, the new rules change the asset limit for an individual to $130,000 ($267,000 for a married applicant) as of July 1, 2022. Even more astonishing – all resources will be disregarded no sooner than January 1, 2024. Meaning, a MAGI-based applicant can have unlimited resources and qualify for long-term care Medicaid at that time.
How will this affect planning for California clients? While there may be a slight decrease in planning strategies needed, strategies will still be needed to:
- Protect the home from estate recovery
- Plan for other benefits, such as SSI or VA benefits
- Plan for incompetency via financial and health care powers of attorney
- Plan for the disposition of remains
- Plan for retirement-account asset inheritance
- Plan for beneficiaries with special needs
- Plan for beneficiaries that will receive their share via trust
The good news is that more Californians will be able to get the care they need. Soon, clients will no longer have to spend down almost everything they own in order to qualify for long-term care Medicaid benefits. The new law also does many other helpful things: allows undocumented folks to receive benefits, changes how prescription drugs are dealt with, and transitions individuals with a share of cost to a fee-for-service plan.