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Medi-Cal Recovery Reform: Relief for Medi-Cal Consumers


Current California law requires the state to place a claim on the estates of those who received Medi-Cal benefits when they were 55 years of age or older to recoup benefits paid, regardless of the type of medical services received.

Medi-Cal’s aggressive recovery program has put an inordinate burden for the families of California’s low-income Medi-Cal beneficiaries. Some heirs and survivors of Medi-Cal recipients have been forced to sell the family home to pay the estate claim. Others, hoping to stay in their homes, were forced to sign a “voluntary lien” which accrues 7% annual interest.
SB 833, the budget bill signed by Governor Brown, incorporated the provisions of SB 33 (Hernandez) and ensures:

  • No recovery on the estates of surviving spouses or registered domestic partners.
  • Recovery will be limited to only what is required by federal law, i.e., for those 55+ years of age, nursing home and home and community based services or any age if the person was “permanently institutionalized.”
  • Hardship waivers of estate claims for homesteads of modest value, i.e., a home whose fair market value is 50 percent or less of the average price of homes in the county where the homestead is located, as of the date of the decedent’s death.
  • The “Estate” from which the state can recover will be limited to the probate estate - thus, living trusts, joint tenancies, and property received via survivorship will not be subject to recovery
  • Interest on liens will be capped at the annual average rate earned on investments in the Surplus Money Investment Fund, (currently at 0.588%) or 7% whichever is less.
  • Those beneficiaries who could be subject to recovery can receive an itemized billing once a year for a $5 fee.

The new provisions are effective for those individuals who die on or after January 1, 2017. CANHR is preparing new consumer education materials on Medi-Cal recovery and these will be posted on our website soon.

CANHR co-sponsored SB 33 with Western Center on Law and Poverty. Western Center, Senator Hernandez, the author, and his staff, Scott Bain, are to be congratulated - for their resolve to help low income communities and prevent the destabilization of these communities.
And thanks to all of you who advocated and sent letters of support. It been a long time coming, but we did it. Meanwhile, contact the CANHR office if you have questions about the new provisions.