New California Medi-Cal Estate Recovery Laws Effective January 1, 2017 Restrict Recovery Against Member Estates After Death

Under prior California law, Medi-Cal’s “Estate Recovery Program” could demand posthumous payment from deceased Medi-Cal enrollee’s estates who were aged 55 or older at the time Medi-Cal benefits were received. The Estate Recovery demand could include a broad range of medical costs paid during the deceased Medi-Cal member’s lifetime. According to the new California Medi-Cal Estate Recovery Program rules in effect January 1, 2017, Medi-Cal recovery is now greatly restricted. Amounts subject to recovery include a narrower range of Medi-Cal services provided to members aged 55 or older. Further, the State’s reach for collecting against the estate of a deceased Medi-Cal member’s estate has been severely restricted.  Highlights of the new Medi-Cal Estate Recovery include: 

  1. Surviving Spouses and Registered Domestic Partners are Protected. Claims for Medi-Cal Estate Recovery may not be made against a Medi-Cal benefit recipient’s surviving spouse or registered domestic partner. 
  2. Amounts Subject to Recovery are Restricted. Amounts subject to Medi-Cal Estate Recovery claims by the State are restricted to include only benefits aid for nursing facility services, certain home and community based services and related hospital and prescription drugs, for Medi-Cal members aged 55 and older. 
  3. Recovery Limited to Assets Subject to Probate. The State’s recovery is limited to only those assets that are subject to probate. This means that establishing an estate plan for Medi-Cal benefit recipients is critical to protect the member’s estate from recovery by the State after death. Contact our office to assist with any estate planning needs to take advantage of the new law. 
  4. Lower Interest Rate on ‘Voluntary Liens’. The interest rate for ‘voluntary liens’ signed by the heirs of the deceased Medi-Cal member will be significantly lower than the prior seven percent interest rate. 

If you are a current or former Medi-Cal enrollee and would like to review a list of your medical expenses that may be subject to an estate recovery claim, you may submit a request once a year to the California Department of Health Care Services, Health and Human Services Agency to receive this information. To make such a request, file form 4017, along the required fee. The form and instructions are available online at this website (click here). 

Please contact our office if you wish to schedule an appointment if you wish to receive legal advice specific to your particular estate planning needs. For general information available to public on the new Medi-Cal Estate Recovery law, resources are available the California Advocates for Nursing Home Reform website or by phone at (800) 474-1116. You may also wish to read “New Rules to Limit Death Fees” (Sacramento Bee, Tuesday December 27, 2016 ).
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