When low-income individuals need medical assistance, California’s Medi-Cal program is there to help. Medi-Cal is the state of California’s version of Medicaid, and it provides medical assistance to a variety of low-income individuals based on eligibility factors like age, ability, income and more.
Medi-Cal Recovery is the process by which the state seeks repayment for the costs of services that were rendered as part of Medi-Cal.
If you receive Medi-Cal benefits, it’s important that you understand the Medi-Cal Recovery process and how it will impact your loved ones and your estate after you pass. In this blog, we’ll cover the changes to the Medi-Cal Recovery process so you can better understand how it will affect your family.
The Medi-Cal Recovery Process
The Medi-Cal Recovery process is fairly straightforward: When a person passes away, the state can make a claim to recover the cost of benefits if the deceased had received Medi-Cal benefits when they were over the age of 55. If the estate cannot pay the claim and the claim cannot be waived, a “voluntary lien” will be placed on the estate.
The updated Recovery policy, effective January 1, 2017, covers several restrictions and specifications for Recovery, including exemptions.
Benefits That Are Subject to Recovery
If you received any of the following benefits at the age of 55 or older, your estate will likely be subject to Recovery to recoup the costs:
- Nursing home care
- Intermediate care for developmental disabilities
- Home- and community-based services, including personal care, assisted living and nursing facility waiver programs
- Prescription drug and hospital services provided while receiving care at a nursing facility or from a home- or community-based service
Medi-Cal beneficiaries under the age of 55 are also subject to Recovery if they were permanently institutionalized in a nursing care facility or intermediate care facility and were determined unfit to be released.
Exemptions to Medi-Cal Recovery
With the update, the Recovery process is subject to more restrictions than in years past, including those discussed here.
If you are survived by a spouse or domestic partner, a Recovery claim cannot be made on your estate (if your spouse or partner also receives Medi-Cal benefits, their estate can be subject to Recovery after their death). Also, if you have children under the age of 21 or disabled children of any age, a claim cannot be made on your estate.
Recovery is also limited to assets that are placed under probate in the state of California. Assets like the following are not subject to probate and therefore not subject to Recovery:
- Any assets that are transferred via living trusts, survivorship, joint tenancies or live estates
- Manufactured or mobile homes
Any property that is no longer in your name is not subject to Recovery, nor are insurance and retirement accounts with one or more named beneficiaries.
Additionally, if your homestead is “of modest value” (valued at 50% or less than the average home value for the county), it is not subject to Recovery.
What This Means for You
One of the best ways to ensure that your estate and property goes to your loved ones instead of the state is to work with an estate planning attorney.
An attorney can help you name beneficiaries for the relevant accounts and set up trusts for your property to ensure it never goes through the probate process or becomes subject to Medi-Cal Recovery. It may not be enough to simply leave property in your will, as willed property is usually subject to probate, so be sure to speak with a professional.
To learn more about Medi-Cal and how estate planning can help your loved ones avoid the Recovery process, contact the Law Office of Clara Yang. We specialize in estate planning, probate and wills to ensure that your estate is protected after you pass.