Understanding Medi-Cal Estate Recovery

Medi-Cal, or California’s Medicaid program, provides medical coverage for specific services and care for eligible citizens at no cost. Some Medi-Cal recipients believe that when they die, the state will take their homes and other property to repay the program through “Medi-Cal Estate Recovery.” However, by better understanding Medi-Cal estate recovery, you may find that is not the case in every situation.

What is Medi-Cal Estate Recovery?

Under California and federal law, the state is required to seek repayment of Medi-Cal benefits received for nursing home, hospital, community-based care services, and certain prescription drugs received by those over age 55. The state can also seek repayment for permanent nursing and intermediate care facility services for those under age 55. When a program recipient dies, the state can seek reimbursement for Medi-Cal services from the individual’s probate estate.

What Happens When a Medi-Cal Recipient Dies?

When a Medi-Cal recipient dies, his or her legal representative, estate planning attorney, spouse, or person in possession of their property is required to notify the Medi-Cal recovery unit within 90 days of the individual’s death. This is done by completing a notice of death form and submitting a death certificate to the designated office.

Limitations on Medi-Cal Estate Recovery

The state is limited to recovering the lesser amount of Medi-Cal benefits paid, or the value of the individual’s probate estate. Additionally, it cannot seek repayment beyond the value of the assets that are subject to probate. Meaning that if the individual’s assets were to transfer outside of probate through a trust or survivorship, for example, they would not be subject to estate recovery.

Exemptions and Waivers to Medi-Cal Estate Recovery

There are certain exemptions and waivers that may apply in specific situations. The State of California will not seek reimbursement if the Medi-Cal recipient is survived by a child who is blind or disabled within the meaning of the federal Social Security Act on the date of the Estate Recovery claim. Further, if the individual is survived by a spouse or registered domestic partner, a claim is prohibited and forever barred. However, if the surviving spouse or registered domestic partner also received Medi-Cal services subject to recovery, his or her estate can be subject to a claim. Survivors may also apply for a hardship waiver to show that the recovery would create too much of a financial burden on them.

Fortunately, by working with an experienced Medi-Cal estate planning attorney, you can take steps to protect your assets from Medi-Cal estate recovery. At the Law Offices of Alice A. Salvo, we help our clients plan for Medi-Cal and the future.  Contact us today to schedule your consultation.