By Pauline Bartolone, Kaiser Health News
Anne-Louise Vernon had been looking forward to signing up for health insurance under Covered California. She was hoping to save hundreds of dollars a month. But when she called to enroll, she was told her income wasn’t high enough to purchase a subsidized plan.
“It never even occurred to me I might be on Medi-Cal,” she said, in reference to the state’s version of Medicaid, “and I didn’t know anything about it.”
She says she asked whether there were any strings attached.
“And the woman said very cheerfully, “Oh no, no, it’s all free. There’s nothing you have to worry about, this is your lucky day.’” she recounts.
Vernon signed up for Medi-Cal on the phone from her home in Campbell. But months later, she learned online about a state law that allows California to take assets of people who die if they received health care through Medi-Cal after the age of 55.
“So I called Medi-Cal and asked specifically, ‘Does this mean what I think it means?’” she says.
It means Medi-Cal managers can take part of her estate later for health care costs she’s accruing now. A 1993 federal law requires states to recoup Medicaid money spent on institutional care, such as nursing homes, and it gives states the option to recover all health costs from people 55 and over. California took that option.
Vernon says she’s panicked and worried. She doesn’t get a monthly bill –- so she’s not sure what she’ll be accountable for.
“I feel as though right now, if I could go to do the doctor and I felt I knew where I stood, there are a number of appointments that I’d be making right now,” says Vernon. “But I feel so unsettled about this whole estate recovery thing, that I’m afraid to go to the doctor.”
The California law has now been on the books for two decades. Elizabeth Landsberg of the Western Center on Law and Poverty says it turns what was intended to be a safety net program into a long-term loan program. It undermines the security that families might pass on to the next generation.
“So in most cases it’s modest family homes that we’re talking about, and so the state will most often come back and put a lien on that home, and unfortunately it does force the kids to sell the homes sometimes, ” says Landsberg.
Landsberg says the law is complicating Medi-Cal enrollment. Some people have refused to sign up, or have terminated enrollment for fear of losing their estate. She says it’s unfair because people buying insurance through Covered California aren’t subject to the same rules.
“For the first time people have to have health coverage. So it’s created an inequity where the lowest income people could lose their assets, and other higher income people who are also getting publicly-subsidized health coverage have no worries, ” says Landsberg.
Over the past 20 years, the state of California has recovered almost a billion dollars that paid for long-term care and basic health services through Medi-Cal.
Norman Williams of the California Department of Health Care Services says that’s just a very small fraction of the overall Medi-Cal budget during that time.
“The funds are collected and returned to the state general fund and along with federal matching funds, that’s used to provide care for members beyond what we have now,” says Williams.
Williams says the average claim is about $95,000.
“But the average amount collected is about $15,000,” he says. “There are many exceptions available. Hardship exemptions for instance. If there are children who are living and under 21, there is no claim against the Medi-Cal member’s estate.”
A bill in the California legislature, SB 1124, would eliminate state recovery for basic Medi-Cal services for older Californians. It would also require the state to provide health claim information for free, so enrollees can keep track of their expenses.
That’s something Anne-Louise Vernon is advocating for.
“I don’t understand why someone my age, in my situation has been singled out to be a cash cow for the state of California, when this is not required by the federal government,” says Vernon.
If the measure is approved by lawmakers, it might have a tough time getting the governor’s signature. The California Department of Finance says it would remove $30 million in revenue that helps pay for the health care of other low-income Californians.
- Medi-Cal Recovery FAQ (California Advocates for Nursing Home Reform)
- Estate Recovery Under Medi-Cal (California HealthCare Foundation)