Protect your Family’s Estate from expensive nursing home costs with some simple pre-planning strategies

Many of us will need long term skilled nursing home stay at some point in our lives.  The cost of this care can range from $6,500 to $12,000 per month depending on the facility.  If you need skilled nursing home care in California and you qualify for Medi-Cal, the state can still come after your estate after the surviving spouse passes away.

Effective January 1, 2017, a new law makes it easier to avoid paying the state back for the cost of the nursing home stay.

• No recovery on the estates of surviving spouses, but watch out for repayment claims by the state after that last spouse passes away.  The state monitors the filing of death certificates and requires all estates to report when a person passes away to the Medi-Cal office. 
• Recovery will be limited to only what is required by federal law, i.e., for those 55+ years of age, nursing home facility and long term care services or any age if the person was “permanently institutionalized.”
• Waivers of estate claims for homesteads of modest value.
• The “Estate” from which the state can recover will be limited to the probate estate – thus, living trusts, joint tenancies, etc. will not be subject to recovery.
• Interest on liens will be limited.
• Those who could be subject to recovery can receive an itemized billing once a year for a $5 fee.
• The new provisions are effective for those who die on or after January 1, 2017

What this means for Californians who receive Medi-Cal Nursing Home expense coverage.

These revisions to the Medi-Cal estate recovery program are the most significant change to the Medi-Cal rules since 1990, when the Spousal Impoverishment Rules were implemented by the Medicare Catastrophic Coverage Act.

The changes implemented as of January 1, 2017, will enable more Medi-Cal recipients to leave an inheritance to their children/families without having to pay back the state on their death. This still does not apply to all Medi-Cal recipients, but it shall exclude from recovery many more recipients than before.

California has been the most generous state in the nation in allowing low income and middle class families to qualify for benefits.  But California has the most aggressive and harsh estate recovery program.  With the new rules, more families will not be forced between choosing health care through Medi-Cal, and losing their life savings.

To learn how to qualify for Medi-Cal Nursing Home coverage and avoid losing your family’s estate to Medi-Cal claw-back after you pass away, please contact our office for a planning consultation.