Long-term care like nursing homes, assisted living facilities, and home care are expensive, and private health insurance policies generally do not cover those services. Medicare coverage for long-term care is very limited, and few people have purchased private long-term care insurance policies.
For California residents needing long-term care services, Medi-Cal is the most common source of funding. Medi-Cal pays for the nursing home expenses of approximately 65% of the residents in California nursing homes. Medi-Cal, the name of California’s state Medicaid program, is funded by both federal and state funds, and it provides health insurance to one-third of California’s population. There are many different ways to become eligible for Medi-Cal, and there are specific eligibility rules for long-term care services like nursing homes, assisted living facilities, and home health care services. The California Department of Health Care Services (DHCS) administers long-term care programs in California.
Skilled nursing facilities are residential facilities that offer round-the-clock skilled nursing care in addition to other supportive services. These nursing homes are expensive, averaging approximately $8,800 per month in California (or $10,600 for a private room). Most people cannot afford to pay their own nursing home expenses.
Medi-Cal, however, will pay for a nursing home only when it is "medically necessary." California defines medically necessary as "when it is reasonable and necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain." For Medi-Cal to pay for a nursing home stay, your treating physician must prescribe a nursing home for you because you either need the continual, round-the-clock availability of skilled nursing care or what's called "intermediate care." Skilled nursing care includes things like giving injections, inserting or replacing catheters, changing wound dressings, feeding through a gastric tube, and treating bedsores. Intermediate care means a protective and supportive environment with "observation on an ongoing intermittent basis to abate health deterioration." To determine whether you need at least an intermediate "level of care" (LOC), Medi-Cal will do an LOC assessment that looks at your limitations in your activities of daily living (ADLs), cognitive function, and physical function and your need for help with medication and treatments.
If you need a health care aide or nurse only for one or two things a day, then Medi-Cal may find that a nursing home stay is not medically necessary, because you could get these services on an outpatient basis or by a home health provider. In essence, your doctor must find that your health is at risk if you do not have access to skilled nursing or intermediate care.
If you already qualify for Medi-Cal, then your Medicaid coverage includes nursing home care if you need it. Groups of people who automatically qualify for Medi-Cal include SSI recipients, participants in the CalWORKs (California’s Temporary Assistance to Needy Families) program, individuals enrolled in California’s refugee programs, and children in its foster care system.
If you do not already qualify for Medi-Cal, you might be eligible if you have little income. Due to the Affordable Care Act (ACA), the income limit for Medi-Cal now works out to 138% of the Federal Poverty Level (FPL) in California. In 2019, that was $17,236 for an individual ($1,436 per month) and $23,336 for a couple ($1,945 per month).
While the ACA has eliminated an asset test for many Medicaid applicants, if you are elderly or disabled, you will still need to have few assets to qualify for Medi-Cal: $2,000 for an individual and $3,000 for a couple. Some assets are not counted, such as a home if your spouse is living there or if you intend to return there, one vehicle, personal belongings, and small burial or life insurance policies.
You are permitted to “spend down” your assets to qualify for Medi-Cal by paying for certain kinds of debts or expenses. If you are trying to spend down your assets, get advice from a lawyer or legal aid office first. Be very careful about transferring any of your assets. Medi-Cal will look back 60 months from the date that you apply for Medicaid-paid long-term care and examine any asset transfers to see if they were legitimate. If you give property away for less than it is worth, then Medi-Cal will impose a waiting period before you can start getting your benefits.
If you are "over-income" for Medi-Cal but have high health care expenses like nursing home fees, then you might qualify for a program called Share of Cost (SOC) Medi-Cal. SOC Medi-Cal allows recipients to pay a certain portion of their income every month towards their medical expenses, and Medi-Cal pays all of the expenses incurred afterward. The portion that the Medi-Cal recipient pays is called his or her share of cost.
SOC Medi-Cal is an important resource for individuals who might have higher incomes but who find that they cannot afford the cost of long-term care. However, Medi-Cal only lets long-term care residents keep a very small personal needs allowance ($35-$50/month) when they have nursing home fees paid by SOC Medi-Cal. Any non-exempt income above that personal needs allowance has to be paid to the long-term care facility before Medi-Cal will cover additional costs each month. In essence, Medi-Cal pays the difference between the monthly cost of the nursing home and the monthly income of the Medicaid recipient (minus $35).
Assisted living facilities (ALFs) offer a wide range of supportive services like housekeeping, medication management, meal preparation, and assistance with dressing and bathing, but they do not offer skilled nursing care. (In 2019, the average cost of an assisted living facility was $4,500 per month.)
In general, Medicaid pays for room and board only when they are offered in an institution that provides skilled care (like a nursing home), and it does not generally pay for room and board expenses in assisted living facilities. However, in California, to assist with the costs of assisted living facilities, the state has created a Medi-Cal program called the Assisted Living Waiver (ALW) that pays for ALFs in some counties.
ALW is a Home and Community-Based Services (HCBS) waiver program that offers care coordination services and can pay for expenses associated with some assisted living facilities and also with some home health services. Most recipients of ALW services still have to pay most of their income to the assisted living facility for room and board charges.
To be eligible for ALW, you must be eligible for Medi-Cal (without the Share of Cost program) and require an intermediate level of care. You meet that level of care if, without the ALW services, you would need to live in a nursing home. However, because ALW is a Medicaid waiver program, it does not need to be equally available to everyone in the state who is eligible for it. At this time, California has opted to make the services available to some seniors and people with disabilities living in Sacramento, San Joaquin, Los Angeles, Sonoma, Fresno, San Bernardino, Contra Costa, Alameda, San Diego, Riverside, Kern, Orange, Santa Clara, and San Mateo counties.
If you qualify for ALW, you must use one of the assisted living facilities that have been approved by the state to participate in the program. The state licenses and regulates assisted living facilities that wish to receive Medi-Cal payments. Those approved facilities are called Residential Care Facilities for the Elderly (RCFE). There are three different RCFE licenses, depending on the level of care that the facility offers. In a Level 1 RCFE, residents are largely independent and receive minimal assistance with their personal care. In a Level 2 RCFE, residents receive frequent assistance with personal activities of daily living. In a Level 3 RCFE, residents receive extensive assistance with personal activities of daily living, and they may occasionally require the services of a skilled nurse or other medical professional. RCFEs can have as few as six beds or as many as 100 beds.
California's SSI/SSP program also pays for some non-medical custodial long-term care. (Many people who are eligible for Medi-Cal are also eligible for SSI.) SSI is paid for by the federal government, but California pays an extra supplement to its residents called the "state supplementary payment" (SSP). The SSP amount is higher for those living in a "non-medical out of home care" situation (board and care, RCFE, or ALF). Someone who receives SSI/SSP in California and lives in an assisted living facility or RCFE receives $1,194 monthly, and the long-term care facility may charge no more than $1,058, leaving a small personal needs allowance (PNA) for the recipient ($136). A couple living in the same facility and both receiving SSI/SSP would get $2,388 monthly, and the long-term care facility could charge no more than $2,116, leaving a PNA for the couple of $272.
California covers home health services as part of its state Medicaid plan. Medi-Cal covers home health services that are medically necessary, like skilled nursing care and medical equipment. For individuals who need ongoing, non-skilled care like assistance with bathing, cooking, and chores, California has the In-Home Supportive Services (IHSS) Program.
The IHSS program pays for home care services that aren't necessarily medical in nature. The types of services covered by IHSS include housecleaning, meal preparation, laundry, grocery shopping, bathing, bowel and bladder care, accompaniment to medical appointments, and protective supervision for the mentally impaired. To be eligible for IHSS, you must be 65 or older, disabled, or blind, and you must be living in a home, not an institution. In addition, you must meet the financial eligibility criteria for Medi-Cal, and you must be unable to live at home safely without IHSS services.
When you apply for IHSS, your county will send a social worker to interview you about your needs and review your medical records. The county will use the results of the needs assessment to decide how many hours of in-home services it will pay for each month. In 2018, non-severely impaired applicants could receive up to 195 hours each month, and severely impaired applicants could receive up to 283 hours. The average hourly rate of a home health aide in California was $28 per hour in 2019. The IHSS program is available with a share of cost for those whose income is above the Medi-Cal limit.
You apply for IHSS through the Department of Social Services, using this Application for Social Services form.
After a Medi-Cal recipient passes away, California's Medi-Cal program will attempt to recover the costs for nursing home and Home and Community Based Services that were paid for by Medi-Cal. The state, however, can only try to seek repayment from assets that pass through probate, so houses that are put in a living trust, or mobile or manufactured homes, are not subject to liens for recovery.
Updated November 6, 2019