Most Californians have some familiarity with the Medi-Cal program. It’s basically our state’s version of Medicaid, and it helps cover low-income Californians’ medical care.
What many people may not realize is that if a loved one who was enrolled in Medi-Cal passes away, the state (specifically the Department of Health Care Services) may try to seek payment from the person’s estate for the premiums paid to the person’s health plan from the time they reached 55 — even if the enrollee never sought medical treatment. It’s called the Estate Recovery Program. If there’s not enough money in the estate to pay this bill, heirs may be asked to sign a “voluntary lien” on their home until they can come up with the money due.
The number of Medi-Cal enrollees increased significantly with the Affordable Care Act and the state’s Covered California program. It rose from about 3.5 million to over 12 million.
There are some exceptions in which DHCS won’t attempt to collect money. It won’t attempt to collect if the deceased person is survived by a spouse, a child under 21 or any child who has a disability or is blind.
There’s not a lot of recourse available if you’re hit with a bill by DCHS for a loved one’s Medi-Cal premiums. However, you should receive an itemized list of benefits that were paid, so it’s important to review that to make sure that it is accurate and that no exempt benefits, such as those for in-home support services, were included.
The state (and all states) are required to recoup some medical costs paid under the federal Medicaid program from beneficiaries’ estates. However, those are mostly benefits paid for nursing home care.
One California state senator has introduced a bill that would limit the amount of money that the DHCS could seek to recover. Similar legislation has been vetoed in the past by Gov. Jerry Brown. However, the current bill (SB 33) is before the legislature in the 2016 session.
If you have an elderly or ill loved one who is enrolled in Medi-Cal and/or is receiving Medicaid benefits for which recovery may be sought, it might be beneficial to consult a California estate planning attorney. He or she can provide guidance to help you determine how much of a recovery claim you may be hit with and how to deal with it.
Source: Center for Health Reporting, “More Californians face Medi-Cal death fee,” Emily Bazar, accessed June 17, 2016