Need to Know Medi-Cal Estate Rule Changes

July 19, 2016

On Monday, June 27, Gov. Jerry Brown signed the new state budget bill for the next fiscal year. The new budget law incorporates changes to the Medi-Cal estate recovery program that will be of significant benefit to the families of Medi-Cal recipients. When a Medi-Cal recipient dies, then the California Department of Health Care Services (DHCS) is required to assert a claim against assets owned by a Medi-Cal recipient upon his or her death. The amount of the estate claim is the amount of money Medi-Cal spends on nursing home residents, at any age, and other Medi-Cal recipients, for benefits paid after they reach age 55. This hasn’t changed.

What has changed is that for Medi-Cal recipients who die on or after Jan. 1, 2017, there will be no estate claim against the estate of the surviving spouse. This means that there will no longer be estate recovery when a married recipient dies and when that recipient’s surviving spouse dies (unless the surviving spouse gets Medi-Cal benefits of his or her own). In addition, and this is big, DHCS Medi-Cal estate claims will be asserted only on estates subject to probate. Any property held by joint tenancy deed, or held within an ordinary revocable trust, will be exempt from estate claims. This means it will be a lot easier for the families of Medi-Cal recipients to avoid having to reimburse the State of California for benefits paid on behalf of their parents or loved ones.

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