If you have Medi-Cal, chances are you get your health care for free.
Until you die, that is.
Since 1993, Medi-Cal – California’s version of the federal Medicaid program for low-income residents – has sought repayment of many medical costs, primarily those incurred after age 55.
It’s called the Estate Recovery Program and under Obamacare, it just got bigger and its reach broader.
How broad? Your family might face a posthumous bill even if you didn’t seek medical care while you were a Medi-Cal enrollee.
“You might never go to the doctor, it doesn’t matter,” says Patricia McGinnis, executive director of California Advocates for Nursing Home Reform. “The state will still try to collect” the premiums it paid to your health plan.
Q: I signed up for insurance under Obamacare and was placed into Medi-Cal based on my income. I didn’t find out about estate recovery until later. This is discriminatory! Why are they singling out low-income seniors?
A: Let’s start with a quick primer.
The federal government requires states to recoup certain medical costs – mostly related to nursing home care – from the estates of some Medicaid beneficiaries after they die.
But California is among 10 states that seeks repayment beyond the federal minimum, says Anthony Wright, executive director ofHealth Access California.
Here, your estate will be expected to pay back the value of ALL coverage you receive after you turn 55.
The state may ask your heirs to sign a “voluntary lien” on your home if there are not sufficient other assets in your estate, McGinnis says.
There are limitations. The state Department of Health Care Services (DHCS), which administers Medi-Cal, cannot require reimbursement:
- until your spouse dies.
- if you’re survived by a child under 21, or a child of any age who is blind or has a disability.
- for services provided before your 55th birthday, unless you’re institutionalized. (A hospital is not considered an institution.)
Because most estates have limited or non-recoverable assets, DHCS says, it recovers funds from only about 5 percent of applicable enrollees.
The average amount collected in fiscal year 2013-2014 was $15,600.
But the Affordable Care Act has raised the stakes significantly.
Since Jan. 1, 2014, when Medi-Cal expanded under the new law, more than 3.5 million Californians have joined, bringing total enrollment to a whopping 12.1 million people.
Of newly eligible enrollees (ages of 19 to 64), about one in four is 55 or older, DHCS says. About 2 million of all Medi-Cal enrollees are in that age range.
Plus, because of recent shifts in how Medi-Cal delivers care, about 80 percent of Medi-Cal recipients are now enrolled in managed care. Unlike Medi-Cal’s traditional fee-for-service model that pays separately for each medical service, the state pays managed care health plans a monthly fee to cover each enrollee’s entire medical needs.
If you’re in Medi-Cal managed care and are subject to estate recovery, your post-death bill will automatically be based on the monthly payments made to your plan – whether you use any medical services or not.
“More people are going to see much bigger claims,” McGinnis warns.
Take Anne-Louise Vernon, 60, who asked today’s question. After she learned about estate recovery, she discovered that the state is paying the Santa Clara Family Health Plan about $600 per month for her care, no matter how much or little she actually receives.
That adds up quickly. Vernon’s total bill for Medi-Cal enrollment from April 2014 through March of this year equals about $7,000.
“They single out the lowest-income seniors and force them into involuntary debt,” she says.
State Sen. Ed Hernandez (D-West Covina) agrees that older Medi-Cal recipients are being unfairly targeted and points to Covered California’s subsidies as an example.
The income dividing line between Medi-Cal and Covered California is 138 percent of the federal poverty level. If you fall below it, you’re in Medi-Cal. If you’re above it (up to 400 percent of the federal poverty level), you qualify for tax credits from Covered California to offset the cost of your monthly premium.
But “you’re not required to pay that (Covered California) subsidy back when you die,” Hernandez says. “Same for every other social program, from food stamps to WIC. You don’t have to pay those back.”
Hernandez’s bill, SB 33, would limit California’s estate recovery to the federal minimum and shield homes of “modest value” from recovery, among other things. Gov. Jerry Brown vetoed a similar measure last year, but Hernandez believes it has more traction now and may be resolved as part of budget negotiations in the coming weeks.
Until and unless the law changes, here are some steps you can take to educate and protect yourselves:
- First, go to the California Advocates for Nursing Home Reform website (www.canhr.org) and download its helpful pamphlet (available in English, Spanish and Chinese) “Medi-Cal Recovery: What You Need To Know & How To Avoid It.”
- If you want a list of medical expenses to date that may be subject to an estate recovery claim, call Medi-Cal at 800-541-5555 to request the necessary Form 6236. Fill that out and submit the $25 processing fee.
- Living trusts will not protect your estate from recovery, McGinnis says. The best way to avoid recovery is to have nothing left in your name at the time of death, she adds. Consult her group’s pamphlet for more advice.
- If the state files a recovery claim, get an itemized billing of benefits paid and review them for errors. Some benefits are exempt from recovery, such as In-Home Supportive Services.
- Call McGinnis’ group for free Medi-Cal counseling and its lawyer referral service at 800-474-1116.
Provided by the Center for Health Reporting at the University of Southern California.