Carney & Sugai, LLP

What is Elder Law? Elder Law encompasses a wide range of issues but is confined to a specific type of client—seniors. Attorneys who practice elder law focus selectively on the special needs, whatever they may be, of older adults.

What Kinds of Assistance Can I Expect from My Elder Law Attorney? Because elder law attorneys specialize in addressing the various legal concerns of elderly clients, they are often involved in a multitude of areas, including estate planning, trust administration, disability planning (encompassing the use of durable powers of attorney, living trusts, and living wills), asset preservation, Medi-Cal planning and eligibility, conservatorship, long-term care placements, elder abuse and fraud, end-of-life planning and more.

What is Medi-Cal? It is likely that the state legislature will enact some changes to California's Medi-Cal regulations and/or law affecting the regulations this year. Although what the changes will be is not yet known because they are still in the drafting stage, we believe the changes will significantly alter or limit the MC Planning options now available to California residents.

The following information is based on the rules, regulations and laws in effect as of this writing (April 1, 2004) and should not be relied upon without consultation with an elder law attorney or other confirmation that the rules, regulations, and laws have not yet changed.

Who is eligible to receive Medi-Cal? Persons who are either blind, permanently disabled, or aged 65 years or over and who are citizens and/or residents of California and financially needy are eligible for Medi-Cal benefits.

What does Medi-Cal cover? Medi-Cal pays for health care services that are medically necessary. Such services include: some prescriptions, physician visits, adult day health care services, some dental care, ambulance services, some home health care services, X-ray and laboratory costs, orthopedic devices, eyeglasses, hearing aids, some medical equipment, etc. Some of these require prior authorization.

Does Medi-Cal pay for nursing home care? Yes, Medi-Cal will pay for nursing home care for eligible persons in a skilled nursing facility that has contracted with the state to provide care under the program, provided that the care has been authorized as "medically necessary" by a doctor.

What are the financial eligibility criteria to qualify for Medi-Cal? To qualify for Medi-Cal, an unmarried applicant may own no more than $2,000.00 in countable available assets (also called resources). The well spouse (also called the community spouse) of a married person applying for Medi-Cal during the year 2003 may own an additional $87,000 to $90,660 of countable available assets which are designated as the Community Spouse's Resource Allowance (CSRA).

When is the spouse of the Medi-Cal applicant considered to be "well"? The spouse of the Medi-Cal applicant is considered to be well for purposes of qualifying for the CSRA as long as the spouse is not residing in a skilled nursing facility and is not receiving Medi-Cal benefits. In Medi-Cal terminology, a "well spouse" is the spouse not living in a nursing home. Another term for the "well spouse" is the "community spouse." The spouse in the nursing home is referred to as the "institutionalized spouse," and, in keeping with the other terminology, the "ill spouse."

How are non-cash assets valued for eligibility purposes? Non-cash assets such as life insurance policies are at their cash surrender value. Real estate is valued at its property tax assessment value. Vehicles are valued using the methodology of the Department of Motor Vehicles in calculating the registration fee each year, which is based in part on 2% of the vehicle's value.

What assets are countable? All assets that are not exempt for eligibility purposes are countable.

What assets are exempt for eligibility purposes? The principal assets that are exempt for eligibility include, with some limitations: the Medi-Cal applicant's home (in certain circumstances); one car; household furnishings and personal effects; wedding/engagement and heirloom jewelry; burial plot; pre-paid irrevocable burial contract; up to $1,500 in a revocable burial trust; funds in any IRA, 401(k), or similar account belonging to the well spouse; funds in any IRA, 401(k), or similar account belonging to the applicant if the applicant is receiving at least annual distributions from such account; life-insurance policies (limited to policies with combined face values of $1,500 or less); and certain annuity contracts.

When is the Medi-Cal applicant's home exempt? The Medi-Cal applicant's home is exempt in the following circumstances:

If the Medi-Cal applicant, or someone on behalf of the applicant, states in writing that the applicant "intends to return home" (even if the applicant may never have the ability to return); or
If the Medi-Cal applicant's spouse, minor child (under age 21), or other dependent relative resides in the home; or
If the Medi-Cal applicant's sibling, who has an equity interest in the home, or child, who has resided there for at least one year prior to the date the applicant entered the nursing home, resides in the home; or
If there are legal obstacles preventing the sale of the home and the applicant provides evidence of attempt to overcome such obstacles; or
If the home is a multiple dwelling unit, one unit of which is occupied by the applicant.

It is important to understand that, although the home may be exempt for Medi-Cal eligibility purposes, it is not exempt from an Estate Claim for recovery upon the later of the Medi-Cal recipient's or spouse's death.

Is the Medi-Cal applicant's income a countable asset? No, income received by a Medi-Cal applicant or the applicant's well spouse is not treated as an asset. However, income is used to determine the Medi-Cal applicant's Share of Cost.

Is there any way to increase the CSRA? Yes, if the well spouse's income is less than the MMMNA amount (see below) of income, the well spouse is entitled to retain sufficient assets to produce the full MMMNA amount. However, this increase in the CSRA may be authorized only by a court order or at a fair hearing.

What is a fair hearing? A "fair hearing" is a hearing before an administrative law judge that the Medi-Cal applicant is entitled to upon filing a timely appeal after a denial of Medi-Cal benefits. An appeal is timely if filed within ninety (90) days following the denial of benefits.

What is Share of Cost? Share of Cost is similar to an insurance deductible for monthly medical costs that must be paid by the Medi-Cal recipient from his or her income for the services received. Medi-Cal then pays the remaining costs of services covered by the program.

How much is the Share of Cost? A Medi-Cal recipient's Share of Cost is equal to the difference between his or her monthly net income and an amount called the maintenance needs standard.

How much is the maintenance needs standard? The maintenance need standard for a single elderly or disabled person in long term care in a skilled nursing facility is $35.00; and if the person is not in a skilled nursing facility, it is $600.00.

Is the well spouse's income part of the Share of Cost? No. Any income received solely in the name of the well spouse belongs to the well spouse and is not part of the Medi-Cal recipient's Share of Cost. This is called the "name on the check" rule. Income received in both spouses' names will be deemed to belong half to each spouse.

What can be deducted from the Medi-Cal recipient's income? The Medi-Cal recipient's income may be used to pay the following: the costs of prescribed medical care and medical insurance premiums not otherwise covered by Medi-Cal; the community spouse's Minimum Monthly Maintenance Needs Allowance (MMMNA); and certain expenses of the recipient's rental property.

What is a Community Spouse's Minimum Monthly Maintenance Needs Allowance? The Medi-Cal recipient's well [community] spouse is entitled to receive a minimum amount of monthly income called a Minimum Monthly Maintenance Needs Allowance (MMMNA). The MMMNA amount for year 2003 is $2,267.00 per month. If the total of the well spouse's monthly income (that is the income that comes in the name of the well spouse) is less than the MMMNA amount, then the well spouse is entitled to that amount of the recipient's monthly income that is required to bring his or her total income up to the MMMNA amount.

Can a Community Spouse's MMMNA amount be increased? In some cases, yes. The community spouse is entitled to sufficient income to provide for his or her support as ordered in a fair hearing. It is very difficult to get the MMMNA increased in a fair hearing, because the state rules are very strict.

Can the Court Increase the Amount of Income the Community Spouse Can Have? In a roundabout way in some cases, yes. Technically, a court cannot increase the MMMNA, but a court can increase the community spouse monthly income allowance. This is a special allowance that can be ordered to be paid from the income of the ill spouse to support the well spouse, and the amount of support the court may order is determined by the amount the community spouse's expenses exceed his or her own income. The community spouse's monthly income allowance is then increased to the amount ordered for his or her monthly support.

Can an applicant give away assets and still qualify for Medi-Cal? A Medi-Cal applicant may give away exempt assets to anyone and non-exempt assets to the applicant's spouse or minor, blind or disabled child without any consequence. However, giving away the applicant's non-exempt assets to anyone other than his or her spouse or minor, blind or disabled child within 30 months of applying for Medi-Cal benefits will render the applicant ineligible for a period of time (called the penalty period) running from the date of the gift. A Medi-Cal applicant can give away assets and still be eligible for benefits once the penalty period expires.

How does a Medi-Cal applicant/recipient who is incapacitated give away assets? If the Medi-Cal applicant or recipient is incapacitated, then either the applicant/recipient's attorney in fact (if any) may make gifts on the applicant/recipient's behalf, if expressly authorized to do so by a valid Durable Power of Attorney, or a court may make gifts on the applicant/recipient's behalf.

How long is the penalty period? The penalty period resulting from giving away non-exempt assets is the number of months that the value of the assets given away would have paid for nursing home care at the average private-pay rate (APPR) for nursing homes in California. The penalty period is determined by dividing the value of the gift by the APPR in effect at the time the individual applies for long-term-care nursing home Medi-Cal. The APPR is typically announced in the month of March each year. The current APPR is $4,477. So, for example, if the applicant gives away $44,770 on the first of the month, he or she would be ineligible for long-term-care Medi-Cal for ten months, under the current APPR.

How are assets held in trust treated? A revocable trust created by the applicant or the applicant's spouse is considered transparent and the trust assets are deemed owned by the applicant or the applicant's spouse. The treatment of assets held in an irrevocable trust is complex and depends on a number of factors including: who established the trust, whose assets funded the trust, what trust assets are available to or for the benefit of the Medi-Cal applicant, and for what purposes the assets are available to the Medi-Cal applicant. It is recommended that the applicant seek professional legal advice regarding the impact of any trust the applicant or applicant's spouse created, funded, or is a beneficiary of.

Can the State place a lien upon the Medi-Cal recipient's property? In California the state is not allowed to lien the Medi-Cal recipient's property, except in the rare circumstance where the Medi-Cal recipient's home is not exempt and is up for sale. However, after the Medi-Cal recipient's death, the state can make an estate claim to be reimbursed for benefits it paid.

When can the State make an Estate Claim for recovery? Unless a spouse or a minor, blind or disabled child survives the Medi-Cal recipient, the state can make a recovery claim against the Medi-Cal recipient's estate. Where the Medi-Cal recipient is survived by a spouse, upon the death of that spouse, the state can make a recovery claim against any property in the spouse's estate that the spouse received through distribution or survival upon the death of the Medi-Cal recipient. The claim must be made within four (4) months after the Director of the Department of Health Services is given written notice of the recipient's or surviving spouse's death and sent a copy of the recipient's/spouse's death certificate.

What assets are included in an Estate? For Medi-Cal recovery purposes, under federal law, an "estate" is defined as "assets in which the individual had any legal title or interest at the time of death (to the extent of such interest)."

How much can the State make an Estate Claim for? The estate claim is limited to the cost of the actual benefits paid by the State for medical services after the recipient was age 55 years or older and the amount the State paid for the recipient's nursing home care at any age. The estate claim is also limited to the value of the recipient's estate at the date of death. Therefore, where there is no estate left, there is no recovery.

Is there a way to avoid an Estate Claim? The best way to avoid an estate claim is to leave nothing in the Medi-Cal recipient's estate at the time of death. Because of the eligibility requirements, most Medi-Cal recipient's own little other than a home. If title to the home is transferred out of the recipient's name prior to death, the State cannot make an estate claim against it. However, caution should be taken as transferring title may disqualify the recipient from receiving further Medi-Cal benefits or have tax consequences that outweigh a Medi-Cal estate claim.

How do I apply for Medi-Cal? In Santa Clara County, Medi-Cal applications are available from and processed through the Social Services Agency Application Center, located at 1919 Senter Road in San Jose.

	Elder Law What is Elder Law? Elder Law encompasses a wide range of issues but is confined to a specific type of client—seniors. Attorneys who practice elder law focus selectively on the special needs, whatever they may be, of older adults. What Kinds of Assistance Can I Expect from My Elder Law Attorney? Because elder law attorneys specialize in addressing the various legal concerns of elderly clients, they are often involved in a multitude of areas, including estate planning, trust administration, disability planning (encompassing the use of durable powers of attorney, living trusts, and living wills), asset preservation, Medi-Cal planning and eligibility, conservatorship, long-term care placements, elder abuse and fraud, end-of-life planning and more. What is Medi-Cal? It is likely that the state legislature will enact some changes to California's Medi-Cal regulations and/or law affecting the regulations this year. Although what the changes will be is not yet known because they are still in the drafting stage, we believe the changes will significantly alter or limit the MC Planning options now available to California residents. The following information is based on the rules, regulations and laws in effect as of this writing (April 1, 2004) and should not be relied upon without consultation with an elder law attorney or other confirmation that the rules, regulations, and laws have not yet changed. Who is eligible to receive Medi-Cal? Persons who are either blind, permanently disabled, or aged 65 years or over and who are citizens and/or residents of California and financially needy are eligible for Medi-Cal benefits. What does Medi-Cal cover? Medi-Cal pays for health care services that are medically necessary. Such services include: some prescriptions, physician visits, adult day health care services, some dental care, ambulance services, some home health care services, X-ray and laboratory costs, orthopedic devices, eyeglasses, hearing aids, some medical equipment, etc. Some of these require prior authorization. Does Medi-Cal pay for nursing home care? Yes, Medi-Cal will pay for nursing home care for eligible persons in a skilled nursing facility that has contracted with the state to provide care under the program, provided that the care has been authorized as "medically necessary" by a doctor. What are the financial eligibility criteria to qualify for Medi-Cal? To qualify for Medi-Cal, an unmarried applicant may own no more than $2,000.00 in countable available assets (also called resources). The well spouse (also called the community spouse) of a married person applying for Medi-Cal during the year 2003 may own an additional $87,000 to $90,660 of countable available assets which are designated as the Community Spouse's Resource Allowance (CSRA). When is the spouse of the Medi-Cal applicant considered to be "well"? The spouse of the Medi-Cal applicant is considered to be well for purposes of qualifying for the CSRA as long as the spouse is not residing in a skilled nursing facility and is not receiving Medi-Cal benefits. In Medi-Cal terminology, a "well spouse" is the spouse not living in a nursing home. Another term for the "well spouse" is the "community spouse." The spouse in the nursing home is referred to as the "institutionalized spouse," and, in keeping with the other terminology, the "ill spouse." How are non-cash assets valued for eligibility purposes? Non-cash assets such as life insurance policies are at their cash surrender value. Real estate is valued at its property tax assessment value. Vehicles are valued using the methodology of the Department of Motor Vehicles in calculating the registration fee each year, which is based in part on 2% of the vehicle's value. What assets are countable? All assets that are not exempt for eligibility purposes are countable. What assets are exempt for eligibility purposes? The principal assets that are exempt for eligibility include, with some limitations: the Medi-Cal applicant's home (in certain circumstances); one car; household furnishings and personal effects; wedding/engagement and heirloom jewelry; burial plot; pre-paid irrevocable burial contract; up to $1,500 in a revocable burial trust; funds in any IRA, 401(k), or similar account belonging to the well spouse; funds in any IRA, 401(k), or similar account belonging to the applicant if the applicant is receiving at least annual distributions from such account; life-insurance policies (limited to policies with combined face values of $1,500 or less); and certain annuity contracts. When is the Medi-Cal applicant's home exempt? The Medi-Cal applicant's home is exempt in the following circumstances: If the Medi-Cal applicant, or someone on behalf of the applicant, states in writing that the applicant "intends to return home" (even if the applicant may never have the ability to return); or If the Medi-Cal applicant's spouse, minor child (under age 21), or other dependent relative resides in the home; or If the Medi-Cal applicant's sibling, who has an equity interest in the home, or child, who has resided there for at least one year prior to the date the applicant entered the nursing home, resides in the home; or If there are legal obstacles preventing the sale of the home and the applicant provides evidence of attempt to overcome such obstacles; or If the home is a multiple dwelling unit, one unit of which is occupied by the applicant. It is important to understand that, although the home may be exempt for Medi-Cal eligibility purposes, it is not exempt from an Estate Claim for recovery upon the later of the Medi-Cal recipient's or spouse's death. Is the Medi-Cal applicant's income a countable asset? No, income received by a Medi-Cal applicant or the applicant's well spouse is not treated as an asset. However, income is used to determine the Medi-Cal applicant's Share of Cost. Is there any way to increase the CSRA? Yes, if the well spouse's income is less than the MMMNA amount (see below) of income, the well spouse is entitled to retain sufficient assets to produce the full MMMNA amount. However, this increase in the CSRA may be authorized only by a court order or at a fair hearing. What is a fair hearing? A "fair hearing" is a hearing before an administrative law judge that the Medi-Cal applicant is entitled to upon filing a timely appeal after a denial of Medi-Cal benefits. An appeal is timely if filed within ninety (90) days following the denial of benefits. What is Share of Cost? Share of Cost is similar to an insurance deductible for monthly medical costs that must be paid by the Medi-Cal recipient from his or her income for the services received. Medi-Cal then pays the remaining costs of services covered by the program. How much is the Share of Cost? A Medi-Cal recipient's Share of Cost is equal to the difference between his or her monthly net income and an amount called the maintenance needs standard. How much is the maintenance needs standard? The maintenance need standard for a single elderly or disabled person in long term care in a skilled nursing facility is $35.00; and if the person is not in a skilled nursing facility, it is $600.00. Is the well spouse's income part of the Share of Cost? No. Any income received solely in the name of the well spouse belongs to the well spouse and is not part of the Medi-Cal recipient's Share of Cost. This is called the "name on the check" rule. Income received in both spouses' names will be deemed to belong half to each spouse. What can be deducted from the Medi-Cal recipient's income? The Medi-Cal recipient's income may be used to pay the following: the costs of prescribed medical care and medical insurance premiums not otherwise covered by Medi-Cal; the community spouse's Minimum Monthly Maintenance Needs Allowance (MMMNA); and certain expenses of the recipient's rental property. What is a Community Spouse's Minimum Monthly Maintenance Needs Allowance? The Medi-Cal recipient's well [community] spouse is entitled to receive a minimum amount of monthly income called a Minimum Monthly Maintenance Needs Allowance (MMMNA). The MMMNA amount for year 2003 is $2,267.00 per month. If the total of the well spouse's monthly income (that is the income that comes in the name of the well spouse) is less than the MMMNA amount, then the well spouse is entitled to that amount of the recipient's monthly income that is required to bring his or her total income up to the MMMNA amount. Can a Community Spouse's MMMNA amount be increased? In some cases, yes. The community spouse is entitled to sufficient income to provide for his or her support as ordered in a fair hearing. It is very difficult to get the MMMNA increased in a fair hearing, because the state rules are very strict. Can the Court Increase the Amount of Income the Community Spouse Can Have? In a roundabout way in some cases, yes. Technically, a court cannot increase the MMMNA, but a court can increase the community spouse monthly income allowance. This is a special allowance that can be ordered to be paid from the income of the ill spouse to support the well spouse, and the amount of support the court may order is determined by the amount the community spouse's expenses exceed his or her own income. The community spouse's monthly income allowance is then increased to the amount ordered for his or her monthly support. Can an applicant give away assets and still qualify for Medi-Cal? A Medi-Cal applicant may give away exempt assets to anyone and non-exempt assets to the applicant's spouse or minor, blind or disabled child without any consequence. However, giving away the applicant's non-exempt assets to anyone other than his or her spouse or minor, blind or disabled child within 30 months of applying for Medi-Cal benefits will render the applicant ineligible for a period of time (called the penalty period) running from the date of the gift. A Medi-Cal applicant can give away assets and still be eligible for benefits once the penalty period expires. How does a Medi-Cal applicant/recipient who is incapacitated give away assets? If the Medi-Cal applicant or recipient is incapacitated, then either the applicant/recipient's attorney in fact (if any) may make gifts on the applicant/recipient's behalf, if expressly authorized to do so by a valid Durable Power of Attorney, or a court may make gifts on the applicant/recipient's behalf. How long is the penalty period? The penalty period resulting from giving away non-exempt assets is the number of months that the value of the assets given away would have paid for nursing home care at the average private-pay rate (APPR) for nursing homes in California. The penalty period is determined by dividing the value of the gift by the APPR in effect at the time the individual applies for long-term-care nursing home Medi-Cal. The APPR is typically announced in the month of March each year. The current APPR is $4,477. So, for example, if the applicant gives away $44,770 on the first of the month, he or she would be ineligible for long-term-care Medi-Cal for ten months, under the current APPR. How are assets held in trust treated? A revocable trust created by the applicant or the applicant's spouse is considered transparent and the trust assets are deemed owned by the applicant or the applicant's spouse. The treatment of assets held in an irrevocable trust is complex and depends on a number of factors including: who established the trust, whose assets funded the trust, what trust assets are available to or for the benefit of the Medi-Cal applicant, and for what purposes the assets are available to the Medi-Cal applicant. It is recommended that the applicant seek professional legal advice regarding the impact of any trust the applicant or applicant's spouse created, funded, or is a beneficiary of. Can the State place a lien upon the Medi-Cal recipient's property? In California the state is not allowed to lien the Medi-Cal recipient's property, except in the rare circumstance where the Medi-Cal recipient's home is not exempt and is up for sale. However, after the Medi-Cal recipient's death, the state can make an estate claim to be reimbursed for benefits it paid. When can the State make an Estate Claim for recovery? Unless a spouse or a minor, blind or disabled child survives the Medi-Cal recipient, the state can make a recovery claim against the Medi-Cal recipient's estate. Where the Medi-Cal recipient is survived by a spouse, upon the death of that spouse, the state can make a recovery claim against any property in the spouse's estate that the spouse received through distribution or survival upon the death of the Medi-Cal recipient. The claim must be made within four (4) months after the Director of the Department of Health Services is given written notice of the recipient's or surviving spouse's death and sent a copy of the recipient's/spouse's death certificate. What assets are included in an Estate? For Medi-Cal recovery purposes, under federal law, an "estate" is defined as "assets in which the individual had any legal title or interest at the time of death (to the extent of such interest)." How much can the State make an Estate Claim for? The estate claim is limited to the cost of the actual benefits paid by the State for medical services after the recipient was age 55 years or older and the amount the State paid for the recipient's nursing home care at any age. The estate claim is also limited to the value of the recipient's estate at the date of death. Therefore, where there is no estate left, there is no recovery. Is there a way to avoid an Estate Claim? The best way to avoid an estate claim is to leave nothing in the Medi-Cal recipient's estate at the time of death. Because of the eligibility requirements, most Medi-Cal recipient's own little other than a home. If title to the home is transferred out of the recipient's name prior to death, the State cannot make an estate claim against it. However, caution should be taken as transferring title may disqualify the recipient from receiving further Medi-Cal benefits or have tax consequences that outweigh a Medi-Cal estate claim. How do I apply for Medi-Cal? In Santa Clara County, Medi-Cal applications are available from and processed through the Social Services Agency Application Center, located at 1919 Senter Road in San Jose.