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As a Medicare beneficiary, the state where you reside can have a big impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how California’s regulations and policies can affect your bottom line, and identifies programs that you may be able to access for help paying for Medicare benefits.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through Medicare Savings Programs (MSPs). These programs will pay for Medicare Part B premiums and – in some cases – Part A premiums, as well as Medicare cost-sharing.
MSP asset limits: The asset limits for QMB, SLMB and QI in California are $130,000 if single and $195,000 if married.
Some low-income Medicare beneficiaries can receive coverage for cost sharing and services not covered by Original Medicare if they’re enrolled in Medicaid for the aged, blind and disabled (Medicaid ABD).
In California, Medicaid ABD covers up to $1,800 each year in dental exams, x-rays, cleanings, fillings, root canals and certain other services. If an enrollee receives prior-authorization, Medicaid will pay for dental care beyond this annual limit.
Medicaid ABD also covers routine eye exams and eyeglasses in California. This website has more information about vision coverage.
Due to similar income and asset limits, many Medicaid ABD enrollees also receive an MSP.
The Medicaid program is called “Medi-Cal” in California.
Eligibility: The income limit is $1,564 a month if single and $2,106 a month if married.
Asset limits: The asset limit is $130,000 if single and $195,000 if married.
In California, individuals with incomes too high to qualify for Medicaid ABD or Home and Community Based Services (HCBS) benefits can enroll in the Medicaid spend-down, which allows medical expenses to be subtracted from income Medicaid counts toward its eligibility limit. California’s Medicaid spend-down is called the Share of Cost Program.
Enrollees activate their coverage by submitting medical bills equal to the amount their income exceeds the spend-down program’s income limit (known as their “excess income”).
California approves spend-down benefits in one-month increments – with additional coverage requiring new medical expenses to be submitted. Enrollees can also pay their excess income directly to Medicaid if they are unable to submit medical expenses.
Medicare beneficiaries who also have Medicaid, an MSP, or Supplemental Security Income (SSI) will receive Extra Help. This program lowers Medicare Part D prescription drug costs. When beneficiaries apply for this program themselves, the income limit is $1,843 a month for singles and $2,485 a month for couples. The asset limit is $16,660 for individuals and $33,240 for spouses.
The Prescription Drug Discount Program for Medicare Recipients allows Medicare beneficiaries to pay the Medicaid rate for prescription drugs, plus a $0.15 processing fee. Medicaid usually pays far less for prescription drugs than the pharmacy’s cash price. This could help beneficiaries requiring medications that aren’t covered by Part D.
Medicare beneficiaries increasingly rely on long-term care, and the portion of seniors needing these services will keep rising as the population ages. However, long-term care is mostly not covered by Medicare. While Medicaid fills the gap in Medicare coverage for long-term care, its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Applicants seeking Medicaid long-term care benefits will be given a level of care assessment to determine the benefits Medicaid will cover for them.
Most long-term care used to be provided in nursing homes. Today, more Americans receive these services in their homes. But some individuals have living or medical circumstances that make nursing home care a better choice.
Income limits: There is no income limit for nursing home benefits. However, enrollees are not allowed to keep all of their income. Instead, they have to pay nearly all of it toward their care: They are allowed to keep only a $35 personal needs allowance and money to pay for health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $130,000 if single and $195,000 if married and both spouses are applying. If only one spouse has Medicaid, the other spouse can keep up to $148,620. This asset limit excludes the value of many household effects, family heirlooms, certain prepaid burial arrangements, and one car.
Medicaid also covers community-based long-term care, which is provided in an enrollee’s home, adult day care center, or assisted living facility. Programs that cover these services are known as Home and Community Based Services (HCBS) waivers because recipients don’t have to enter a nursing home. In California, HCBS recipients must need help with at least two activities of daily living (ADLs).
Income eligibility: The income limit is $1,564 a month if single and $2,106 a month if married.
Despite this income limit, HCBS recipients usually pay a portion of their income toward their care. If that amount is too high, it leaves enrollees without enough money to pay for health and living expenses. In California, enrollees can keep a personal needs allowance of $600 (as of 2018), but remaining income must be paid toward their care.
Asset limit: The asset limit for HCBS is $130,000 if single and $195,000 if married (and both spouses need care). If only one spouse has Medicaid, the other spouse can keep up to $148,620.
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits. Normally with Medicaid benefits, the income of both spouses is counted – regardless of who is applying. For LTSS benefits, usually only the applying spouse’s income is counted.
Spousal impoverishment rules allow the spouses of Medicaid LTSS recipients to receive a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s income, along with resource and housing allowances. These rules apply when one spouse needs Medicaid coverage for LTSS, and the other spouse doesn’t have Medicaid.
In California in 2022, the community spouse can keep:
In most states, owning a home disqualifies enrollees from receiving Medicaid LTSS coverage if they have significant home equity (more than $688,000 in many states).
In California, however, there is no limit on home equity for an applicant’s principal residence. (California law actually does limit an applicant’s home equity to $840,000, but the state has not issued regulations to implement this limit.)
Because long-term care is expensive, individuals may try to qualify for Medicaid LTSS by giving away or transferring their assets. To curb these asset transfers, federal law requires states to institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States can choose to also have a penalty period for HCBS, and most have done this.
California has an asset transfer penalty for nursing home care, but not for HCBS. This means transferring assets will not disqualify applicants from receiving HCBS in California. (New York had been the only other state not to have an asset transfer penalty for HCBS, but it decided to implement a penalty period for those services starting in 2021.)
In California, this asset transfer penalty is based on a 30-month lookback period, during which time asset transfers and gifts are prohibited. In every other state, the look-back period is 60 months for nursing home care and typically the same period is used for HCBS, too.
The penalty’s length is calculated by dividing the value of all gifts and asset transfers occurring during the look-back period by the private cost for nursing home care (which is $10,933 a month in California in 2023).
Each state Medicaid agency is required to recover what it paid long-term care related costs beginning at the age of 55. States can choose to also pursue estate recovery from enrollees in this age range for services that are not long-term care related. This process is called estate recovery.
Estate recovery also applies to certain enrollees under 55 who received long-term institutional care.
California previously attempted to recover its payments for all Medicaid benefits, but the state’s estate recovery rules were revised under recent changes to the law. For enrollees who pass away after December 31, 2016, the state will only attempt to recover the cost of nursing home benefits, HCBS, and related medical and prescription drug costs (that were received while 55 or older).
Due to these changes, California will never pursue estate recovery for enrollees who are survived by a spouse or registered domestic partner.
The state will only pursue estate recovery for assets that are subject to probate – meaning things like living trusts, life estates, and retirement accounts with “transfer-on-death provisions” are not recovered.
Health Insurance Counseling and Advocacy Program (HICAP)
Free volunteer Medicare counseling is available through California’s Health Insurance Counseling and Advocacy Program (HICAP) by calling 1-800-434-0222. This is a State Health Insurance Assistance Program (SHIP) offered through the California Department on Aging.
HICAP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. They may also be able to offer referrals to local agencies for services like home care and long-term care. This website has a list of local HICAP offices in California.
Elder Law Attorneys
Elder law attorneys help individuals plan for Medicaid long-term care needs. Visit the National Academy of Elder Law Attorneys (NAELA) search feature to find an elder attorney locally.
California Health Advocates
California Health Advocates is a Medicare advocacy non-profit that supports legislation and policies that improve the lives of Medicare beneficiaries and their families. The organization also helps administer the California SHIP.