Did our actions affect MIL's MediCal eligibility?

1 answer | Last updated: Sep 14, 2017
A fellow caregiver asked...

My mother in law is currently enrolled in Medicare and MediCal. She is disabled with degenerative arthritis and is currently in a skilled nursing facility covered under Medicare for 100 days. We recently withdrew $3,000 from her account to partially reimburse us for the funeral package purchased for her by us. Will this eliminate her from MediCal eligibility?

Expert Answers

Medicaid (called Medi-Cal in California) coverage of either medical care or long-term nursing home care is available only to someone who has very low income and very few assets (such as savings). For Medicaid medical coverage, Medicaid looks at the amount of assets available to someone at the time they apply. So, for Medicaid medical coverage, the fact that your mother-in-law spent $3,000 on a funeral package should not affect her eligibility.

For Medicaid long-term nursing home coverage, on the other hand, (which your mother-in-law might need at some point), Medicaid looks not just at the amount of assets a person has at the time he or she applies but also at any transfers of money during the previous 5 years before applying. If someone has spent or given away large sums of money during that period, Medicaid will decide whether these were legitimate gifts or expenditures, or were instead just giveaways in order to qualify for Medicaid, in which case Medicaid could delay eligibility.

When looking at someone's assets to determine their eligibility, however, Medicaid does not count certain "exempt" assets. These include a home the person lives in, a car, and certain other personal items. These exempt amounts also include a burial plot and up to $1,500 set aside for funeral expenses. So, at least $1,500 of the $3,000 your mother-in-law spent -- reimbursing you -- for the funeral package would be exempt from consideration by Medicaid in deciding her eligibility. If the funeral package she bought also includes a burial plot, then the value of the burial plot would also be exempt (in addition to the $1,500 for funeral expenses).

Even if not all of the $3,000 is exempt, it probably would not affect her Medicaid nursing home coverage eligibility anyway. That's because it is a legitimate expense for her benefit, not just a gift or transfer to you. You should keep all the financial paperwork for the funeral package, so that you can show Medicaid that you paid for it initially and that the transfer of the $3,000 from your mother-in-law to you was simply to repay you for those funeral-related expenses.