What is Medi-Cal estate recovery?

Medi-Cal or Medicaid estate recovery is the government-sanctioned seizure of assets belonging to low-income individuals. These assets include homes, properties, and savings. Simply put, estate recovery is when the government “bills” your estate once you pass away to collect and seize the health care coverage you received when you were alive.

In California, your estate may be subject to recovery if: (1) you have received healthcare coverage through Medi-Cal(2) you are age 55 or older, or (3) you have been permanently institutionalized.

 

What are the changes for California?

On June 27, 2016, Governor Jerry Brown signed into law SB 833, or Senate Bill 833, which will bring the biggest changes in 25 years to the state’s Medi-Cal program. This bill enacts a budget that seeks to reduce poverty and increase opportunities for low-income Californians. Starting January 1, 2017, here are some of the main ways SB 833 will help low-income Californians and limit estate recovery when an individual passes away:

  • Prohibits recovery from the estate of a Medi-Cal recipient upon death if they are survived by a spouse or a registered domestic partner (RDP)
  • Medi-Cal recipients before age 55: estate recovery is limited to long-term care services such as a nursing home and only against real property
  • Medi-Cal recipients age 55 or older: recovery may be made for both real and personal property
  • Basic health care services will no longer require recovery
  • Recovery is prohibited for living trusts, joint tenancies, Transfer on Death (TOD), etc. and limited only to probate estates (all assets owned by a person that becomes subject to probate administration upon death)
  • Medi-Cal members are entitled to easy and timely access to information about how much of their estate is owed to the government upon death

The full, detailed list of amendments to the state’s estate recovery program can be found in Section 22 of the SB 833 bill text.

 

Conclusions on Medi-Cal estate recovery:

SB 833, a budget bill signed into law by Governor Jerry Brown, represents the state’s efforts to combat poverty and provide more opportunities for low-income Californians. Medi-Cal estate recovery is seen as an enrollment barrier and a contributor to intergenerational poverty. 

New limits to estate recovery in California means that basic healthcare services provided by the state may not be collected from the estate, and that surviving family members and partners may continue to live without the fear of an estate recovery even after a Medi-Cal member’s death.  The key is to plan ahead and ensure that those who are or may be on Medi-Cal can minimize or prevent estate recovery.  


CALL US FOR A FREE CONSULTATION

If you want to make sure your assets are not subject to estate recovery, contact our experienced estate planning lawyers. Call (626) 307-2800 to take advantage of your free consultation and prevent your belongings from being classified as a probate estate. Our Rosemead estate planning attorneys serve clients throughout Los Angeles, including PasadenaArcadia, and San Gabriel.

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