Bill Would Limit State’s Seizure of Medi-Cal Beneficiaries’ Assets

On Tuesday, the California Assembly Committee on Health is expected to vote on a bill (SB 1124), by Sen. Ed Hernandez (D-West Covina), that would limit the amount of assets the state can recoup from deceased Medi-Cal beneficiaries' estates, the Contra Costa Times reports.

Medi-Cal is California's Medicaid program.

Background

In 1993, the federal government began requiring all states to recoup the long-term care costs of Medicaid beneficiaries ages 55 and older after they die. Recouping other Medicaid costs for those beneficiaries is optional, and California is one of 10 states that recovers a variety of costs for Medi-Cal beneficiaries after they die.

California collects an average of about $60 million from Medi-Cal beneficiaries' estates each year -- half of which goes to the U.S. Department of Treasury.

The seizure of Medi-Cal beneficiaries' assets has become a heated issue in light of the Affordable Care Act's Medicaid expansion, the Times reports.

Further, CMS in a Feb. 21 memo urged states to eliminate the recovery of Medicaid benefits beyond long-term care costs.

Details of Bill

SB 1124 would:

• Limit asset recovery of Medi-Cal beneficiaries ages 55 and older to long-term care in nursing homes;
• Prohibit asset recovery from the estates of surviving spouses of deceased Medi-Cal beneficiaries; and
• Require the state to provide beneficiaries with a list of Medi-Cal expenses subject to estate recovery. 

Hernandez said, "I don't know of any other program that demands repayment after a recipient dies," adding, "We don't do it for Medicare. We don't do it for people getting coverage through the (Covered California health care) exchange, and most other states don't require estate recovery."

Next Steps

Two Senate committees already have passed the measure. If the measure passes the Assembly Health Committee next week and then the Assembly Appropriations Committee, the full Legislature could vote on the bill by the end of August.

Gov. Jerry Brown (D) then would have until the end of September to act on the legislation. However, Brown's budget advisers have urged the governor to reject the measure. A state Department of Finance analysis found that California would lose $15 million annually if the measure becomes law (Seipel, Contra Costa Times, 6/11).