California’s 2022 budget includes funding that will drastically increase the amount of assets a disabled person can retain and still be eligible for Medicaid coverage.
Previously, California (as does all other states), would cap an individual’s assets at $2,000 (not including a home or vehicle) to qualify for Medicaid coverage. As of July 1, 2022, California will increase the cap to $130,000 with an additional $65,000 per family member living in the household. Assets in Medicare Set-Asides (MSAs) are not counted as income when determining traditional or expanded Medicaid (or Medicare) eligibility.
This change means injured parties will be able to keep at least $130,000 in assets and any amount of funds in an MSA account and still maintain eligibility for traditional or expanded Medicaid benefits including long-term care. More good news: asset limits will be phased out entirely by July 1, 2024.
There is one major catch, however. The beneficiary must reside in California. If they move out of state, the asset limit reverts to $2,000. Injured parties would either have to establish a Special Needs Trust in the new state, liquidate their assets to $2,000 or below or move back to California to continue receiving Medicaid benefits.
We will discuss strategies and potential legal landmines you need to be aware of in upcoming eblasts. In the meantime, make sure to provide a written disclosure to clients of the possible impact on Medicaid benefits by moving out of state.
Please give me a call (949-355-4726) or Will Lindahl of CPT Institute (877-695-6444) with any questions.