Congress enacted the Deficit Reduction Act on February 8, 2006. The State of California Senate enacted statutes (Senate Bill 483) in September of 2008 stating any provisions of the Deficit Reduction Act would become effective when the California Department of Health Services creates implementing regulations.
In September of this year, the Department of Health released four sets of “implementing” regulations. These regulations have not been enacted. However, it is now expected the regulations will become effective within the next twelve months, at the soonest.
These regulations will make changes in the following areas:
1. The look-back period (which is currently 36 months) will be increased to 60 months (five years).
2. The penalty period for making uncompensated transfers by a Medi-Cal applicant will start as of the date of the Medi-Cal application, instead of the date of the gift made by the Medi-Cal applicant.
3. Medi-Cal applicants will be required to disclose any interest in any annuity at the time of making the application. The applicant will also be required to name the State as the remainder beneficiary.
4. The home, which is currently an “exempt” asset for qualification purposes, will maintain its “exempt” status if it has less than a $750,000 equity interest.
5. Continuing Care Retirement Community admission fees paid by a Medi-Cal applicant will be counted as a “resource” in certain cases.
As stated above, these changes have not yet been implemented and when they are, California has confirmed they will not be retroactive to the date the Deficit Reduction Act was enacted by Congress, but rather, on the date they are actually enacted here in California. However, it is important to keep a close eye on when these changes are implemented, because they will have an impact on Medi-Cal applicants when these changes are enacted.
Ms. MacDonald’s practice is limited to estate planning, probate, conservatorships, elder law and trust administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite B-124 in Valencia, California. She can be reached at 661-294-6464.