California’s $122 billion general fund budget includes money to dramatically limit a practice advocates had long lobbied against — the seizure of assets, after death, of people who had received health insurance coverage through the state’s Medi-Cal program.

The federal government requires that states recover money for nursing home care. But it also gives states the option to recover costs of general medical care — hospitalizations and doctors visits — for people 55 and over. California had chosen to participate in this additional “estate recovery program,” meaning that low income people risked having their homes and other generally modest savings seized after their death.

Such seizure is not required in other health programs, such as Social Security, Medicare or Covered California.

The new budget includes $30 million to limit Medi-Cal estate recovery only to that required by federal law.

Pat McGinniss, executive director of California Advocates for Nursing Home Reform, called it a “great day” that she has been fighting for since 1993 when then-governor Republican Pete Wilson included the “draconian bill” in the state’s budget. Most states did not pursue this optional recovery program.

“Instead of destabilizing low income communities, it allows people to not worry about losing everything if they go on Medi-Cal,” McGinniss said.

For three years, Sen. Ed Hernandez, D-West Covina, had backed the effort to limit the scope of California’s estate recovery. Under the new budget, Medi-Cal estate recovery is limited to that required by federal law.

“Estate recovery forces people over age 55 who need Medi-Cal to choose between their own health care and passing on modest possessions to their heirs,” Hernandez said in a statement. “It is a huge victory that this year’s budget limits estate recovery so that people with modest family homes can pass it on to their children.”

The law goes into effect Jan. 1. People 55 and over who are on Medi-Cal for general health services and die this year may still face estate recovery.

Estate recovery is still required for people who receive nursing home care paid for by Medi-Cal.

  • jskdn

    This is so obviously the right policy that people should be worried about the will and/or ability to engage in ethical reasoning of the one person that stopped it from happening earlier, Gov. Jerry Brown. Remember, people are prohibited by government from equal access to Covered California insurance that is available to those with greater incomes, insurance that has no estate recovery options. Gov. Brown, who vetoed previous efforts that had no opposition in the legislature owes an apology to all the people he cause either to worry about their estates or who went without insurance because of that.

    Just to be clear, estate recovery from health care is completely different from that for long-term nursing home care, which isn’t part of standard health insurance, including Medicare. The one thing about that kind of recovery is that, whatever estate recovery policies government chooses regarding Medicaid/Medi-Cal recovery for long-term nursing care, it should apply them consistently.

Author

Lisa Aliferis

Lisa Aliferis is the founding editor of KQED's State of Health blog. Since 2011, she's been writing and editing stories for the site. Before taking up blogging, she toiled for many years (more than we can count) producing health stories for television, including Dateline NBC and San Francisco's CBS affiliate, KPIX-TV. She also wrote up a handy guide to the Affordable Care Act, especially for Californians. Her work has been honored for many awards. Most recently she was a finalist for "Best Topical Reporting" from the Online News Association. You can follow her on Twitter: @laliferis

State of Health Sponsored by

Become a KQED sponsor