Q. Our father is 90 years old and is being cared for in a nursing home, which costs about $10,500 per month. We need to apply for a Medi-Cal subsidy to help with the cost, but Dad has an old insurance policy with accumulated cash value which puts him over the $2,000 Medi-Cal resource ceiling for a single person. Our Problem: Dad has severe dementia, can’t access the policy cash value on his own, and we don’t have authority to do it for him, as Dad never signed a Durable Power of Attorney. Further, the insurance company won’t even talk to us. Is there any way around this in terms of Medi-Cal?
A. Yes, indeed! It’s unfortunate that your father never created a Durable Power of Attorney (“DPOA”) which would now authorize you to access that policy on his behalf. But, so be it. The good news is that Medi-Cal recognizes that these situations happen and provides a solution. However, some background:
It is generally known that Medi-Cal allocates an applicant’s assets (which Medi-Cal calls “resources”) into two categories: Those that are EXEMPT (such as a home, furniture, and one automobile) and those that are COUNTABLE (such as cash, savings, and investments). Cash value in an insurance policy would normally be allocated to “countable” assets. And, you are correct, in that a single person over age 65 cannot have more than $2,000 in countable resources and qualify for a Medi-Cal Long Term Care (“Medi-Cal LTC”) subsidy.
However, what is not well known is that there is actually a third category of resources, i.e. resources that are UNAVAILABLE. Resources are unavailable when they cannot be accessed, such as when (1) there is a dispute pertaining to their ownership, (2) where there are various co-owners who object to sale or liquidation, and—apropos to your own situation – (3) where the owner is comatose or suffers from dementia, cannot access them himself and there is no DPOA which authorizes an agent to do so on his behalf. Your situation would fall into the last example and be considered unavailable when tallying up your father’s countable resources when seeking a Medi-Cal LTC subsidy.
Here’s the good news: So long as an applicant’s resources are unavailable, they are treated the same as resources that are exempt, i.e. they do not count when determining whether an applicant is under or over the Medi-Cal resource cap. That is precisely your situation. Thus, the insurance policy cash value should not disqualify your father from a Medi-Cal LTC subsidy.
My suggestion is that you secure a doctor’s letter attesting to your father’s incapacity and corresponding inability to handle his financial affairs. Then, when you submit his application for a Medi-Cal LTC subsidy, include that doctor’s letter with the other required documents, advise that your father never created a DPOA which would authorize an agent to handle his financial affairs on his behalf, and assert that the insurance policy cash value should therefore be considered “unavailable”. Some Medi-Cal eligibility workers may be unfamiliar with this concept, and so you might do well to engage an Elder Law attorney with experience in these matters to help you.
The upside benefit of securing a Medi-Cal LTC subsidy can be quite dramatic. By helping you pay for your father’s care, the subsidy can help relieve what would otherwise be tremendous financial stress upon your family. Good wishes in your effort.