CA Estate Planning Blog

Thursday, March 16, 2017

California Law Now Limits Medi-Cal Estate Recovery

What steps can I take to protect myself from a Medi-Cal lien?

Governor Jerry Brown approved legislation last year that limits California’s estate recovery from low income recipients of Medi-Cal.  The new law took effect on January1st of this year, and it considerably limits the power of the state of California to recover from individuals who receive state medical assistance during their lifetime.  As of this year, claims filed by the California Medi-Cal Estate Recovery Program will not exceed the minimum requirements set under federal law.  California estate planning attorneys are helping clients to protect their estates from Medi-Cal liens under the new law.  

Medi-Cal and Recovery Liens

Health care and nursing home expenses can be astronomical in the state of California.  To assist with these costs, the state and federal government created Medi-Cal, which provides qualifying low income California residents with coverage for medical expenses.  Eligible recipients may receive Long Term Care Benefits, but after their death, the state will attempt to put a lien on the estate and potentially a spouse’s estate to recoup costs. California traditionally used an optional estate recovery to recoup all Medi-Cal costs, in addition to those required under federal law.   

Federal Recovery Limits

Up until this year, a Medi-Cal recovery lien was permitted to extend to the estate of the surviving spouse of a deceased Medi-Cal recipient if the spouse received assets from that estate.  Federal law, however, does not authorize such a lien.  Now, Medi-Cal will follow federal recovery limits, meaning that spouses are protected from liens by the state.

Even further, under the new law, Medi-Cal can put a lien only on the Medi-Cal recipient’s probate estate. The probate estate includes those assets that would be subject to probate, regardless of whether the estate actually goes through probate.  Any assets that are placed in a trust prior to the death of the Medi-Cal recipient should thus be protected.

Medi-Cal can provide much needed financial assistance to older individuals across California.  If you are receiving these benefits or may in the future, consult with a California estate planning attorney to protect your estate from a recovery lien.

 


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