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As persons grow older, their need for health care or other services related to aging becomes more demanding. Statistically, the majority of a person's health care expenses will be incurred in the last 5 years of life. For most individuals, this means at later ages. In the past 20 years, due in large part to dramatic advances in technology and pharmaceuticals, the cost of medical care, especially later in life, has risen significantly in the United States.
In 2002, there were more than 40 million persons who had no medical insurance of any kind, and one study asserted that over the course of the year, some 70 million persons were without medical insurance for at least one day. For many of these persons, the federally-funded Medicaid program is available to cover some of their needs. Medicaid is a federal-state partnership in which the federal government pays for the majority of medical claims, while the states are responsible for their own administrative expenses. Each state is given the flexibility to determine what will be covered, within federal guidelines, so that the program is most beneficial for the residents of their state.
In California, the program is known as Medi-Cal, but it is still largely funded with federal reimbursements. Medi-Cal is free or low-cost coverage for adults and children with limited income and resources.
California residents in a variety of situations may qualify for benefits from Medi-Cal; however, individuals who receive cash assistance from one of the following programs are automatically eligible for Medi-Cal:
Other categories of individuals that may be eligible for Medi-Cal include:
For most persons, Medi-Cal operates as, or contracts with, an HMO to provide services and care for recipients.
In order to qualify for long-term care benefits under Medi-Cal, there is a specific asset spend-down test which must be met monthly in order to qualify for benefits. The amounts are readjusted annually, and currently a person needing long-term care cannot have countable assets in excess of about $3,000. If the person is married, they will still not qualify for Medi-Cal benefits until their spouse's countable assets fall below about $90,000. These rules are in place to prevent persons from using the resources of the state instead of using their own assets. The spend-down can result in a surviving spouse living near poverty as a result of having to dispose of a large share of their assets in order for the spouse to receive Medi-Cal benefits.
If an individual's income exceeds the Medi-Cal limit for the family size, that individual will have to pay a certain amount, called share of cost (SOC), in the month when medical expenses occurred. Once the SOC has been met, Medi-Cal will pay the rest of the covered medical bills for that month.
Benefits provided by Medi-Cal need to be understood, particularly when it comes to long-term care, as a "no interest" loan. When a person dies, the state may exercise its right to pursue asset recovery from the estate of a Medi-Cal recipient up to the full value of the benefits that were paid for by the state. This could result, after death, in the seizure of a person's home or business property, which were not part of their "countable assets," in order to reimburse the state for its expenditures. Even though these possessions may have been intended to be transferred to children or other heirs, the state may have a priority claim over all others.
In 2014, Medi-Cal eligibility was expanded to include the nondisabled, nonelderly, childless adults up to 138% FPL. Household income is calculated using Modified Adjusted Gross Income (MAGI), based on the household's income tax returns with adjustments. There is no asset test for MAGI households.
In addition, to qualify for Medi-Cal coverage under the Adult Expansion Medi-Cal program, individuals:
Medi-Cal coverage may be available to children under age 19 if their household's income is no more than 250% of the FPL.