Enrollment into Expanded Medi-Cal Threatened by Recovery Fears
(Courtesy of San Diego Elder Law Center News)
As recently reported in the Los Angeles Times and Consumer Reports, many people are declining to enroll in Expanded Medi-Cal available under the Affordable Care Act because of fears that the State of California will be entitled to reimbursement from their estates after they die.
Indeed, in a letter issued on February 21, 2014, the Centers for Medicare and Medicaid Services (CMS) stated that states are required to seek recovery for Expanded Medi-Cal beneficiaries “who were 55 years old or older when they received medical assistance, from the estates of such individuals for amounts at least equal to medical assistance paid on their behalf…”
Fortunately, the same exceptions and planning opportunities for avoiding recovery actions that exist for current Medi-Cal programs also apply to Expanded Medi-Cal. Among these exceptions are:
- Exclusion from recovery any amounts paid before age 55, unless care was provided in a skilled nursing facility;
- A total bar to recovery if the benefit recipient has a minor or disabled child at the time of their death;
- Deferred recovery during the life of a surviving spouse;
- A limitation on recovery to assets in the name of the benefits recipient at the time of their death.
We find the rule regarding exclusion of assets not in the name of the benefits recipient to be a particularly potent planning tool, though potentially subject to adverse Medi-Cal and tax impacts if not properly handled.
CMS has made it clear that they are still reviewing the applicability of recovery regulations for “Expanded Medi-Cal.” While it is possible they will reconsider and exempt this program from recovery rules, or that legislative action will address the issue, the wise consumer should assume recovery rules still apply.