In July of 2021, the California Legislature passed its 2022 – 2023 budget. The plan included Assembly Bill 133, implemented to create a more accessible and affordable health care system for Californians. As part of AB 133, the asset test for certain Medi-Cal programs will be eased and eventually eliminated.
The limit change will prevent individuals from being disqualified from receiving benefits because of their assets. It will also give them more control over their finances and property ownership. Individuals will have greater opportunities for preserving benefits and planning for their future.
Changes to the Asset Test for Medi-Cal Programs
A critical part of AB 133 is changes to the asset requirement for some Medi-Cal programs, which will be rolled out in two phases.
For Phase I, beginning on July 1, 2022, the asset limit will increase to $130,000 for individuals and $65,000 for the individual’s household members who will be evaluated but are not applying for benefits. The new threshold is a significant jump from the current $2,000 limit for individual applicants.
Phase II will eliminate the asset limit altogether. This change will take effect in January of 2024.
Opportunities Arising from AB 133
The asset threshold updates will have significant impacts on individuals receiving benefits. For instance, they will be able to put more funds in the bank and acquire more property without losing their eligibility for programs requiring an asset test.
The opportunities afforded by AB 133 give individuals greater power in defining and realizing their financial goals. They won’t be hindered by asset limits in place for the benefits they are receiving. This helps not only the individual themselves but also their loved ones, as they will now have options for leaving assets to their heirs.
The Role of an Elder Law Attorney
The changes to the asset limits might seem simple, but because they open up various avenues for individuals to explore, financial planning and asset protection become more complex. Elder law lawyers looking to protect their clients’ best interests must carefully consider and discuss all available options.
Determining the path forward for an individual requires a deep dive into each individual’s circumstances. The attorney must help their client understand how certain financial decisions may impact the benefits and what can be done to help preserve them.
Identifying a direction for a client requires asking questions like:
- What type of care is needed and desired?
- What costs are associated with a certain plan?
- What amount is necessary for the individual now and throughout their lifetime?
- Can a trust help the individual achieve their goals?
- What are the short- and long-term effects of investing benefits until the asset limit is eliminated?
Contact Our Firm Today
AB 133 will bring about positive changes for those receiving or applying for Medi-Cal benefits. But various factors will need to be considered when planning for the future. Because of the impacts decisions concerning asset acquisition and bank account deposits will have, it is beneficial to consult with a lawyer before moving forward with a plan. An attorney can help understand the law and the pros and cons of certain choices.
If you need assistance in Valencia, please schedule a consultation with Kaiden Elder Law Group, PC by calling (661) 306-2500 or submitting an online contact form today.