California offers the Medi-Cal health coverage program for adults and children who have limited financial resources. Some people who lose health insurance after retirement may qualify for Medi-Cal benefits. If you anticipate applying for Medi-Cal, be aware that the program requires repayment after members pass away.
Repayment means that the Medi-Cal program seeks compensation for services provided from the estates of members. Only estates of Medi-Cal members who received benefits when they were age 55 or older and who own assets on their deaths must participate in Medi-Cal repayment, also called estate recovery.
Before January 1, 2017, Medi-Cal members’ estates had to make repayment from all assets owned by the deceased member at the time of death. Medi-Cal would seek recovery of all payments made for most medical services rendered, including any monthly managed care premiums.
The law changed effective January 1, 2017 to the benefit of people planning their estates. Now, estates only have to make repayment from estate assets subject to probate that were owned by the deceased member at the time of death. Medi-Cal seeks recovery for payments made on certain services, including “nursing facility services, home and community based services, and related hospital and prescription drug services received when the member was an inpatient in a nursing facility or received home and community based services.” This includes monthly managed care premiums.
Because the new law requires repayment only from estate assets subject to probate, not all assets the deceased owned, the repayment burden on the estate could be substantially reduced. In other words, if the deceased’s estate does not need to go through probate, Medi-Cal will have no source from which to seek repayment. Many types of assets are not subject to probate. These include:
If you anticipate being a Medi-Cal member after age 55, your estate plan should account for the required Medi-Cal repayment obligation. One way to accomplish this is by creating a trust and moving your assets into the trust before your death. To determine the best ways to plan for repayment, consult a qualified estate attorney.
Wondering about the impact of Medi-Cal repayment on your estate? Angela Klenk, Esq. and the team at Beach Cities Estate Law couple personalized attention to your estate plan with big law firm experience for a winning combination to give you peace of mind. To schedule a case evaluation, visit Beach Cities Estate Law online or call (424) 400-2125.