Elder Law

Many seniors mistakenly believe that Medicare pays for care at home or in an assisted living facility or nursing home. In fact, Medicare pays for only limited long term care services. Under certain limited circumstances, Medicare pays for nursing home or rehabilitation hospital services. However, payment for these circumstances is limited to twenty days, with an additional eighty days of coverage after the senior pays a daily share of cost of $148 per day (for 2013). After one hundred days, Medicare pays nothing toward the cost of skilled nursing home care. The Medicare website contains more information about what services are paid for by Medicare.

Medicare does not pay for caregiving services in the home (except for hospice services) or for care in an assisted living or RCFE facility (RCFE facilities are also known board and care homes).

Long Term Care Medi-Cal pays for care in a skilled nursing facility only. There are very limited waiver programs for care in an assisted living facility, RCFE or at home in some counties. There are very strict financial limitations to qualify for Long Term Care Medi-Cal.  Planning for Medi-Cal eligibility should not be undertaken without the assistance of a qualified elder law attorney, as inappropriate transfers of assets can lead to ineligibility for Long Term Medi-Cal Care for up to five years.


According to California law, the state may recover the expenses from nursing home care provided to a Medi-Cal beneficiary when they die. The recovery concept is important because the funds recovered are then put back into the Medi-Cal system. Thus, a claim may be made against the estate of the beneficiary spouse after his or her death if they are still on the property title. However, the state may not make a recovery claim: (1) during the lifetime of a surviving spouse, (2) where there is a child that survives the beneficiary and is under the age of 21 or (3) where there is a child that survives the beneficiary that is blind or permanently disabled under the Social Security Act.

Notification of Spouse Recipient’s Death. Within 90 days of the beneficiary’s death, the state must be notified (DHHS) of the death by the surviving spouse, the personal representative, estate beneficiary or successor trustee. Proper notice includes sending written notice and a copy of the death certificate.

Liens vs. Estate Claims. These two concepts are often confused. A lien is placed on the property before the beneficiary dies to essentially “hold” the property. Estate claims are made after the Medi-Cal recipient dies. California is prohibited from placing liens on homes of nursing home recipients or their surviving spouses, except where the home is not exempt (i.e., where the nursing home recipient indicates that they have no intent to return to the principal residence) and being sold. These types of liens are very rare because most homes are considered exempt due to an intent to return to it, or a child or surviving spouse living in it.

Estate Claims. After the Medi-Cal recipient’s death, the state can make an estate claim against an individual who is 55 or over when they received Medi-Cal benefits, or received nursing home benefits at any age, unless there is a surviving spouse, minor, disabled or blind child. “Estate” is defined as assets that an individual has a legal interest or title to at the time of their death, such as cash in a bank account. These also include assets conveyed through common and life estates, living trusts, joint tenancies and tenancies in common.

Other Claims. There can be no recovery claims against IRA’s, term life insurance policies or pension funds related to work unless the beneficiary is the state.

Strategies to Avoid or Minimize State Recovery. The best way to avoid or minimize an estate claim is to leave nothing in the Medi-Cal recipient’s estate. Most beneficiaries leave only a home, which has been transferred out of their names during life. If property is transferred during life, there can be no valid recovery claim. However, care must be taken, as discussed above, as to proper planning and traps to avoid when transferring assets.
  • Transfer of the Primary Residence. When transferring the primary residence or other valuable property from the Medi-Cal beneficiary to the spouse, a recorded grant deed should be executed. A declaration should accompany the deed stating that the beneficiary spouse relinquishes all community property rights in the property. If the nursing home spouse is incompetent, this transaction may be accomplished through a Probate Code §3100 petition to a court.Be especially mindful that the spouse receiving title to the home does not sell or refinance it before the beneficiary spouse qualifies for Medi-Cal or enters a nursing home. The cash proceeds from these transactions will increase the family assets and will be considered when computing the CSRA. Only after qualification and after residing in a nursing home, should the at-home spouse increase his or her assets to avoid affecting the nursing home spouse’s eligibility.
  • Irrevocable Life Estate. In an irrevocable life estate, the grantor/beneficiary forever gives up the right to the property. For this reason, recovery claims on irrevocable life estates are generally waived, unless the state finds some value in it. A revocable life estate (where the beneficiary reserves a right to the property) is subject to recovery.

Often people are reluctant to access federal or state government programs because they want to, "pay their own way." Financial independence is an admirable sentiment. Nevertheless, financing the costs of long term care when a loved one enters the nursing home remains a problem for many seniors.  I have a little story for you:

The doctor sees three patients.

  • To the first patient the doctor says, "I’ve got good news for you. You have heart disease. You require quadruple by-pass surgery. The cost will be $250,000. The good news is Medicare and your supplemental insurance pays all costs. 

  • The doctor sees the second patient and says, "I’ve got good news for you. You have cancer and require radical surgical intervention. The cost will be $100,000. The good news is Medicare and your supplemental insurance pays all costs. 

  • Finally, the doctor sees the third patient and says, "I’ve got bad news for you. You’re going to live a very long time. You have Alzheimer’s disease. The bad news is that you will spend your life savings on your costs of nursing home care. You don’t have a health care problem. You have a housing problem.” 

In this country we discriminate based upon the type of illness you have, acute or chronic. If, by the luck of the draw, you have an acute condition and require hospitalization, your health care costs are covered. If you have a chronic illness – like dementia, stroke or Parkinson’s disease – anything that requires custodial care in a nursing home for an extended period, your life savings are at risk.

Also, I like to tell my clients that the very wealthy do not seem to have any moral issues with transferring assets out of their estate to avoid estate and income taxes. In fact, many would argue that if they did not take advantage of the laws allowing them to reduce their taxes then they are leaving money on the table. Do they then feel guilty as they drive the government-funded highways? Do they feel guilty as they enjoy the reduced prices of food because of government subsidies to the farms or the reduced price of oil thanks to the government subsidies to the oil industry? No, they don’t feel guilty. The law specifically allows for people to remove assets from their estate and you’re leaving money on the table if you don’t take advantage.