New California law eases the bite of Medi-Cal recovery


Many people in California depend on Medi-Cal for their health care coverage. When a Medi-Cal recipient dies, the state has the legal right to recover from the recipient's estate the medical expenses made on their behalf. The state cannot seek reimbursement, however, if the Medi-Cal recipient left a surviving spouse or a minor, disabled or blind child.

Recently, Governor Brown signed into law a significant reduction of Medi-Cal's right to seek reimbursement from estates. Under the new law, which is part of the state budget legislation, the state's Medi-Cal recovery right is limited to the minimum required by federal law. Thus, under the new law the state may only make a claim against the estates of recipients who received Medi-Cal benefits while in a nursing home or while over the age of 55.

Previously Medi-Cal could go after the estate of a surviving spouse for benefits the surviving spouse received from the estate of their deceased spouse. The new law now prohibits Medi-Cal from seeking recovery from the estate of a surviving spouse.

Finally, under previous law "estate" was defined broadly and included assets held in trusts as well as probate estates. The new law limits Medi-Cal's right of recovery to probate estates. The new law will apply to the estates of recipients who die on or after Jan. 1, 2017.

For those who may still be subject to Medi-Cal reimbursement, there are a number of effective strategies to protect assets from seizure by the state. It is important for people to understand the complex California estate planning and estate administration laws in order to minimize or eliminate the risk of losing assets to a Medi-Cal recovery claim.

Source: California Advocates for Nursing Home Reform, "Medi-Cal Estate Recovery Reform Passes Legislature," July 6, 2016

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