- Dennis Fordham
- Posted On
Estate Planning: Affordable Care Act and expanded Medi-Cal
Under the Affordable Care Act (“ACA”), low income persons under age 65 may enroll in the expanded Medi-Cal in order to meet the federal requirement that everyone have health care insurance.
At age 65, Medicare covers doctor visits, hospital visits and some prescription drugs. Medi-Cal, however, remains relevant for long-term residential custodial care in a skilled nursing home.
Expanded Medi-Cal targets a whole new population, including young and middle-aged persons without disability and/or with assets.
For example, someone who lost his or her job might become eligible for such expanded Medi-Cal based on low income (i.e., at or below 130 percent of poverty level).
A major concern among persons enrolling in the expanded Medi-Cal program is whether their assets, including their home, might later become answerable to Medi-Cal for reimbursement when they die.
Unlike traditional Medi-Cal, eligibility for the new expanded Medi-Cal is based entirely on income. An applicant’s assets, age, disability and whether the applicant is pregnant are irrelevant.
Federal ACA legislation provides that persons participating in the expanded Medi-Cal program are subject to different estate recovery rules than those persons participating in traditional Medi-Cal.
On Feb. 21, the federal Centers for Medicare and Medicaid Services (“CMS”) stated that while estate recovery also applies to individuals in the expanded Medi-Cal that CMS intended, as much as legally possible, “… to eliminate recovery of Medicaid benefits consisting of items or services other than long term care and related services … .”
That is, with respect to any services received by persons while under age 55, CMS does not want to recover costs paid for physician visits, prescriptions and hospital stays and only wants to recover costs paid for skilled nursing home services (which involves custodial care).
However, because Medicaid/Medi-Cal is a combined federal and state program much is left up to the individual states to decide.
Washington and Oregon already have enacted legislation that prevents estate recovery for their residents who enroll in the Medicaid expanded program for all services except for skilled nursing home care, as is required since 1993 under federal law.
Presently, California is also considering legislation that would limit California’s estate recovery regarding expanded Medi-Cal to what is required under federal law.
The proposed limitations would prevent recovery for any and all expanded Medi-Cal services received before age 55.
For those between ages 55 and 65, the proposed legislation would allow recovery both for skilled nursing home care services and also for community based services (i.e., hospital and prescription drug services) as is required by federal law.
Such persons might, in order to avoid possible estate recovery, decide to enroll in Covered California. However, anyone eligible for expanded Medi-Cal who participates in Covered California would receive no government subsidies and so pay the full premium.
Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 870 S. Main St., Lakeport, California. Fordham can be reached by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 707-263-3235. Visit his Web site at www.dennisfordhamlaw.com .