How To Avoid Medi-Cal Estate Recovery

Knowing how to avoid Medicaid estate recovery can be essential to your long-term goals. Medi-Cal (California Medicaid) is a government program that pays for certain types of essential medical services. Medi-Cal can be a vital resource for those who are retirement age because the program pays for long-term nursing home care expenses. When a Medi-Cal recipient dies, however, their estate may have to repay their Medi-Cal program costs through something called the Medi-Cal estate recovery.

This often raises the question: How do I protect my assets from nursing home care? The good news is that there may be ways that you can protect your assets from recovery while still qualifying for Medi-Cal. Here is more on how to avoid MediCal estate recovery.

What is Medi-Cal Estate Recovery?

The Medi-Cal program pays for certain types of medical expenses for individuals who cannot afford to pay for them on their own. After a Medi-Cal recipient dies, the program can seek repayment from their estate for the cost of the services they received. This process is called Medi-Cal estate recovery.

Can Medi-Cal Take My Home?

Medi-Cal is income-tested and does not impose an asset limit.

• You are allowed to own and live in your home while qualifying for Medi-Cal benefits.
• When you pass away, anything you own is considered to be part of your estate and, therefore, may be subject to Medi-Cal estate recovery. This means that the State can pursue payment from your probate estate to pay for your Medi-Cal services.

Medi-Cal Estate Claims

Outside of certain limited exceptions, the State can make a Medi-Cal recovery claim against a former recipient’s probate estate. The “estate” refers to the recipient’s real and personal property as defined by California probate law. However, the claim is limited to the lesser of the amount of Medi-Cal benefits received or the value of the estate. Any outstanding debts and mortgages can also reduce the estate’s value. Additionally, if the recipient had an insurance policy, IRA, or pension benefit, those funds would not be part of the estate recovery unless the State was named as a beneficiary or they reverted to the estate.

Estate Planning and Medi-Cal

Planning for your long-term care needs through Medi-Cal should be part of an overall comprehensive estate plan. Medi-Cal planning should also be conducted long before the potential need for services arises. If you don’t have long-term care insurance and don’t expect to have the means to pay out-of-pocket for nursing home care, the time to start Medi-Cal and estate planning is now.

By planning, you may be able to keep some assets out of your probate estate. If the property is not subject to California probate, the State cannot pursue it through Medi-Cal recovery. For instance, property placed into a living trust or held through a joint tenancy is not subject to California probate and, therefore, would not be subject to Medi-Cal estate recovery.

How Do I Avoid Medi-Cal Estate Recovery?

If you want to avoid Medi-Cal estate recovery completely, you can do so by leaving nothing in your probate estate. This will mean making sure that all exempt assets such as your personal residence and vehicle are not in your name at the time of your death.

Making certain that ownership is transferred is just one part of the equation. The best way to protect your assets from nursing home care and Medi-Cal estate recovery, and plan for the future, is by working with an experienced Medi-Cal and estate planning attorney.

You and your attorney can work together to develop a Medi-Cal estate planning strategy that is suited to your circumstances and protects your interests.

We Can Help You and Your Family with Medi-Cal Estate Recovery

At the Law Offices of Alice A. Salvo, we are California Medi-Cal and estate planning attorneys with the experience you need to plan for your future. We can help you evaluate your circumstances and determine the best estate planning and Medi-Cal solutions for you. Please get in touch with us online or by phone to schedule an appointment today.

Medi-Cal Recovery Frequently Asked Questions

Understanding estate recovery Medi-Cal can be challenging, especially with various rules and exceptions. Below are answers to some frequently asked questions about the recovery process.

What is the purpose of Medi-Cal estate recovery?

Medi-Cal estate recovery is a program by the Department of Health Care to recoup costs paid for Medi-Cal services from the estates of deceased recipients. It applies to certain Medi-Cal beneficiaries who received nursing home or home and community-based services.

Is my home subject to estate recovery if I receive Medi-Cal?

If you have a trust or a life estate, your home may be shielded from recovery claims. Estate recovery claims are generally limited to probate assets, meaning property transferred outside the estate may not be at risk.

Are there protections for a surviving spouse?

Yes, surviving spouses are exempt from estate recovery during their lifetime. However, once the surviving spouse passes, estate recovery Medi-Cal can initiate claims against any remaining assets.

What if I only receive Social Security benefits?

Receiving only Social Security may not prevent estate recovery. The State of California can still seek reimbursement if the individual received covered Medi-Cal services and left assets in their estate.

Does recovery apply to all Medi-Cal beneficiaries?

Not all Medi-Cal beneficiaries are subject to recovery. The program primarily affects those who have utilized community-based services, long-term care, or similar recovery programs provided by Medi-Cal.