Medi-Cal Recovery: What It Is and How to Avoid It

Medi-Cal is California’s version of Medicaid. The program provides free or low-cost medical care for low-income individuals. Medi-Cal differs in a number of respects from Medicare which most people are eligible for when they reach 65. Because Medicare does not cover long-term care, many seniors in California depend on Medi-Cal to cover long-term care if it is needed.

When a Medi-Cal recipient dies in California, the state can seek repayment for certain services paid by Medi-Cal. California law limits what instances the state may seek recovery. 

California’s law on Medi-Cal recovery changed effective January 1, 2017.

Medi-Cal beneficiaries who die after January 1, 2017, are not subject to recovery for basic health services such as doctor’s visits, prescription drug costs, or managed care reimbursements, unless these services were related to nursing home care or home and community based services.

Post-January 1, 2017, Medi-Cal recovery is limited to: 

• Beneficiaries who were 55 or older when they received Medi-Cal benefits for nursing facility services, certain home and community based services and related hospital and prescription drugs. Community based services include Medi-Cal funded programs that deliver care in the home and community and are designed to allow people to remain at home rather than live in a facility.

 • Beneficiaries who were under age 55, if they were “permanently institutionalized” in a nursing facility, intermediate care facility or other medical institution and for whom, after notice and opportunity for hearing, it was determined that they cannot reasonably be expected to be discharged and return home. 

Recovery from the surviving spouse/registered domestic partner of the deceased Medi-Cal beneficiary is barred:

If the the beneficiary is survived by a spouse or registered domestic partner, a Medi-Cal recovery claim is barred. However, if the surviving spouse/partner receives Medi-Cal benefits subject to recovery, then a claim for recovery could be made after their own death.

Recovery from minor or disabled children is barred:

If the beneficiary is survived by a minor child (under age 21), or a disabled child of any age, Medi-Cal recovery is barred. This is true whether the child lived with the beneficiary or not.

Medi-Cal recovery is limited to assets that are subject to probate:

Assets distributed through a will, depending on the value of the estate, are usually subject to probate in California. However, assets transferred via living trusts, joint tenancies, survivorship, life estates, and account balances the bank transfers upon death to a designated beneficiary are no longer subject to recovery.

Manufactured homes and mobile homes are also excluded from estate recovery claims, since they are not subject to probate in California.

How to Avoid Recovery

Individuals who receive Medi-Cal benefits subject to recovery can limit recovery through proper estate planning. By limiting the part of their estate that is subject to probate, it is possible to reduce or eliminate the possibility of Medi-Cal recovery.

For more information on Medi-Cal recovery see the California Department of Health Care Services website.