Estate Planning and Business Law

New Medi-Cal Recovery Law - Senate Bill (SB) 833

The new law provides for the following:

  1. Medi-Cal recovery applies only to those who are 55 years or older, were in nursing homes or participated in home and community based services;
  2. Avoids recovery against the estates of surviving spouses or registered domestic partners. This is a big change because before the state could recover against spouses and domestic partners;
  3. Restricts the amount of interest the states can assess on liens. Before the interest rate was 7% a year, now it will drop dramatically to 0.55%;
  4. Limits recovery to assets that are subject to probate only. This is another big change because if it the assets were in a revocable living trust, it was subject to recovery;
  5. Requires the state to provide to a beneficiary a copy of the Medi-Cal expenses that may be recoverable; and
  6. Requires the state to waive the claim on a substantial hardship when the estate is subject to recovery on a homestead of modest values.

So, what is still subject to Medi-Cal recovery:

  1. Even though the state can no longer recover for basic health services, e.g. doctor’s visits, prescription drugs or managed care reimbursements – it can recover for services that are related to nursing home care or home based services for those who are 55 and older or if the beneficiary is permanently institutionalized.[1]
  2. Recovery is limited to services required to be recovered under federal laws, for example:
    1. Home and Community Based Services;
    2. Intermediate care for developmentally disabled;
    3. Related hospital and prescription drug services given to a person who is receiving nursing facility services and home and community based services;
    4. Nursing home care.

Medi-Cal planning is planning for those who want assistance paying the high cost of nursing home care – which cost an average of $10,000 - $15,000/month – and, at the same time, maintain their assets. This planning is for everyone regardless of income level.

Ivette M. Santaella, partner at the law firm of Blackwell, Santaella & Jahangiri, LLP, located in the tri-valley areas of San Ramon, Danville and Dublin, can assist you with this valuable and growing area of elder law.

[1] Permanently institutionalized means any person – regardless of age – who are inpatients in a nursing facility or other medical institution who must pay a share of cost for their care and who, after notice of a hearing, the state has determined cannot be expected to be discharged and sent home.