The Department of Health Care Services has updated their Estate Recovery Program page to reflect the new rules ushered in with the passage of SB 833 in 2016. There had been some confusion as to who was actually subject to new Estate Recovery rules. Essentially, it all hinges on when the Medi-Cal beneficiary dies.
Medi-Cal Estate Recovery And Date Of Death
Prior to SB 833, any individual who received Medi-Cal benefits after the age 55 was subject to Estate Recovery. That meant that anyone age 55 or greater who was in an MAGI Medi-Cal health plan, expanded under the ACA, would be subject to Estate Recovery. The Department of Health Care Service would attempt to recover the cost of the MAGI Medi-Cal health insurance premiums paid on behalf of the beneficiary. MAGI (Modified Adjusted Gross Income) Medi-Cal is most often offered to individuals and families when they apply for health insurance through Covered California and the household income is below the eligibility level for the Obamacare monthly tax subsidy.
For Medi-Cal health plans that normally run from $400 to $500 per month, a sizeable liability could accumulate for people over 55 if they were enrolled in a Medi-Cal health plan for many months. If the MAGI Medi-Cal beneficiary died before January 1, 2017, and was over 55 years old, their estate is still subject to the Estate Recovery Program. Now, under the new program, if a MAGI Medi-Cal beneficiary dies after January 1, 2017, and was over 55 years old at the time they received the health insurance benefits, their estate will not be subject to repayment of those premiums.
The modifications to the Estate Recovery Program only apply to individuals who were enrolled in a MAGI Medi-Cal health plan. Estate Recovery is still active for beneficiaries who were in a skilled nursing facility and received benefits for health insurance, home and community based services, and related hospital and prescription drug services.
Changes to Estate Recovery effective January 1, 2017 due to Legislation SB 833: