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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.


Will Medi-Cal Take my Assets?

By on | 62 Comments

Question: Will Medi-Cal take my assets to pay my medical expenses after I sign up.

Answer: Not while you’re alive. But the state of California may seek to recover medical and long-term care expenses paid for by MediCal from deceased clients who leave behind significant assets. This only applies to beneficiaries over the age of 55.

62 Comments

My problem is. I was ACA for 2 years. I was 62 at the time. I’m on permanent disability. I was on it for 2 years then they put me on Medicare. Now I pay 134.00 monthly plus whatever deductibles. I pay part D and paid for a dental/eye care program. So I pay 174.00 a month. I get social security and my retirement. But, my wife has no job and has been a housewife for all the years it took to raise our children. They are all grownup now and it’s just her and I on my income. Now under the ACA we could have afforded a plan. But, by putting me on Medicare they cut her loose. So she had to find a medical plan so she can be covered so as to not get a penalty at the end of the year for not having insurance. Well when she went to get a plan with the ACA they treated her as an individual with my income. Because I didn’t fall with in the amount considered to be low income she was forced to take the Bronze plan. And it’s very expensive. I don’t make a lot of money on a fixed income but I make just enough to not qualify for more medical cost help. Between her and I my medical is costing me around 400.00 a month. That’s a little over 8 1/2 percent of my monthly income. And if you add up our house payment and all the other bills, it don’t leave us with much wiggle room. If she gets really ill we are going to be on the hook for a lot of the cost. How is it they don’t consider us as a couple when it comes to applying for medical insurance, which the government forces us to have, yet they let us file as head of household when I file my taxes. Another issue we had is when we called the ACA to report an income increase they said we never did. We in fact did call them, but they said we never did and that’s not true. They, Covered California screwed up so bad, at one time, they said we made way more then I did. I had to correct them on that. So we had a dispute and had a hearing, over the phone, with a judge that sided with the ACA. It wasn’t fair that all they had to do is play dumb and say they had no records of us calling them to let them know my income had changed. In the end I ended up paying a huge tax bill I couldn’t afford, do to them not recording our calls. They said they, the ACA, give out a incident number on every call. That is not the truth and we tried in vane to tell the judge they never gave us a number that’s why there is no history of us calling. I’m very careful about owing any one money and I can’t ever recall having to had to pay taxes but because the ACA is so screwed up it cost me dearly. In my opinion this whole thing about having to carry insurance and not really giving us real help is just out of control. You can’t imagine how mad I am at this point being called a liar by some faceless government worker. My credit is way more then perfect, but do to these yahoo’s it could have become fouled up. It’s not fair for them, the ACA, to not take into consideration one’s asset’s. I know people far more richer then me paying almost nothing for their health insurance, because they don’t have to report their assets. The middle class is getting so badly screwed that in the end there will be no middle class. I think that is the ultimate plan of the government, Republican or Democrat. They don’t care! I’ll get off my soap box now and thank you for the platform.

If you have been on Medi-Cal and you re-certify but have an account with a bank that is only a Prepaid Debit card, and not a checking or savings account, over the limit of $2,000 worth of personal property but your Social Security is under the FPL, what can you do to keep your Medi-Cal?

As has been posted several times, under current law, Medi-Cal Asset Recovery is mandated for all persons receiving assistance with the cost of “institutional” care at any age. Persons over age 55 have a meter running on all Medi-Cal reimbursed health care expenses, whether institutional or not — which means doctor’s office visits, labs, x-rays, hospitalizations, home health care, medications, cancer treatments, etc, and institutional care. The state can modify the Asset Recovery rules if it is willing to forego a portion of federal Medicaid funding … so don’t expect CA to do that any time soon … our elected representatives are too drunk on “revenue” and their ability to spend state money foolishly on other things of lesser importance.

Asset recovery is generally directed at real property, such as a home, but may be filed against any tangible property upon which a lien may be filed and recovery can only occur AFTER the Medi-Cal beneficiary dies, but must be postponed for as long as the individual’s spouse or minor children resides in the home. The lien must be satisfied before any sale or transfer of the asset can be consummated.

A waiver may be granted under certain circumstances.

Review the various posts in this thread for links to waiver request forms and other informational material available from the CA Department of Health Care Services which oversees Asset Recovery.

When you were called for the hearing, what was the outcome ? What is the department of he hearing called ? My Mom is on Medi-Cal her case worker contacted the Medi-Cal supervisor in Hercules Ca in 2014, regarding if they will take over my Mom’s house when she passes away. My Mom’s case worker got was a racist comment about the country my Mother was born in. Then he checked with someone else and this other person said only if she has been staying in a hospital for like 2 weeks or if she was living in a Senior care facility.

How and from who can I get a straight answer from regarding this issue ?

this happened to us and I was given a phone number to a State Hearing for Appeals dept. They will file an appeal and your case is ultimately heard and decided upon by a judge… good luck.

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Jill …

Yours is an all-too-familiar dilemma that CoveredCA, the state Dept of Health Care Services, and the county Medi-Cal agencies have failed to correct in over a year. But … thanks to a Superior Court decision late last week, the DHCS and County agencies are mandated to complete the enrollment process within the statutory 45 day limit.

DHCS claimed that it has reduced the backlog to less than 20% of all applications, but I find that a bit hard to believe. Your situation is proof of that. Your children should have been issued their Benefit ID Cards (“BIC”) directly from DHCS within a matter of days of your application.

You don’t mention what county you are in, but there are many counties with provider directories that can be viewed online. Virtually all hospitals and urgent care centers will accept Medi-Cal patients — with or without ID cards. You can call physicians in private practice and ask if they accept Medi-Cal patients.

Once the county processes your children’s application, you should be offered one or more choices of Medi-Cal Managed Care plans. In Los Angeles County, for example, the two primary MMCs are Health Net and LA Care. Of the two, Health Net has a broader network. Any of the physicians accepting new patients within the MMC network will accept your children.

You can thank the Obama administration and the Democrats for putting your family in this “split” condition. Their plan is to put as many Americans on the health-welfare rolls as possible, because once this happens, the chance of people finding their way off is much more difficult, and they are among the loudest to complain when Congress considers reducing benefits or eligibility standards.

If your household income were just over the 266% of the Federal Poverty Line amount, this would not have happened. For a family of four, the 2014 minimum amount to avoid Medi-Cal for the children was $63,441. The 2015 amount has not yet been announced, but will likely be a few hundred dollars higher — probably very close to $64,000.

My family applied for insurance under covered california. My husband and I got subsidized plan under kaiser but our children did not- we had to enroll them in MediCal. Six weeks later we have still not heard a word from MediCal even though the Covered California website says they are conditionally eligible” and “can visit a doctor this month (Jan)? What I don’t understand is how and where my children can access care through Medi Cal if we don’t even have a Medi Cal card or enrollment confirmation yet?

Nancy …

It is remotely possible that the person who signed the affidavit of sponsorship could be held liable for Medi-Cal health care expenses. However, this generally applies to resident aliens who are in need of assistance with the cost of long-term care due to their inability to perform (or needing assistance with) Activities of Daily Living. The USCIS “Fact Sheet” — which apparently has not been updated since 2011 — says this:

“Medicaid and other health insurance and health services (including public assistance for immunizations and for testing and treatment of symptoms of communicable diseases, use of health clinics, short-term rehabilitation services, prenatal care and emergency medical services) other than support for long-term institutional care” are “Benefits Not Subject to Public Charge Consideration”

When those words were published, Medi-Cal (Medicaid) was still a “means tested” program — one had to have both income at or below 130% of the Federal Poverty Line (“FPL”) AND could not have more than a minimal amount of assets. That all changed on January 1, 2014, when Medi-Cal (Medicaid) became a system of eligibility based solely on income (at least for persons who are not institutionalized). I don’t know why USCIS has not updated its FAQs.

Additionally, I do not believe CA limits Medi-Cal eliigibility to legal residents who have been here less than five years, which was generally the case when Medi-Cal was considered a means-tested program.

I have a situation where myself and my dad (age of 60) the sponsor for my uncle (age of 53) and cousin (age of 25) who came to the US a year ago through immigration and they now hold a valid permanent green card. They are qualified and currently in the MediCal program.

The question is, if any of them were to use MediCal and have a large debt, will myself and my dad be responsible to repay MediCal the medical bill? My dad and I each own a property and this seems like a huge risk for my uncle and cousin to use MediCal program for us.

Kelly …

Eligibility for Social Security Retirement/Medicare is not only based on your work record, but may be based on that of a spouse or former spouse. If a person has been married for 9 months or longer to his/her current spouse at the time Medicare eligibility (at age 65), then the spouse’s work record will establish eligibility — as long as the spouse has the required 40 “credits”.

If you were formerly married for at least 10 years and remain unmarried following a divorce or death of a former spouse, then you can use that spouse’s work record (beyond the date of a divorce) for the required credits.

As for CoveredCA, past age 64, you may purchase a health plan through the Exchange, but will not be eligible for premium tax credits. As a result, the cost of a health plan would be much higher than the cost of Medicare Parts A & B even if you had to pay the full premiums for both parts. And you would also be subject to penalties for not enrolling in Medicare.

The PPACA changed the Social Security system’s rules for Medicare. All persons age 65 and older are required to enroll in Medicare, whether they are eligible for premium-free Part A or not. Failure to enroll in Part A within 3 months of turning age 65, and a person will incur a 10% premium penalty for twice the number of months they were not enrolled in Part A.

This is in addition to the 10% cumulative lifetime premium penalty for each 12 months of non-enrollment in Part B (unless covered by an employer-sponsored plan as an employee or dependent). There is also a 1% per month cumulative lifetime penalty for not having “creditable coverage” for prescription medications (the Part D of Medicare).

CoveredCA does not “pay” anyone’s medical expenses. All it does is provide payment of advance premium tax credits to health insurers.

That and waste money it had no business spending on a float in the 2015 Tournament of Roses Parade.

Hello, When I reach the official retirement age, I won’t be eligible for Social Security because I was a caregiver for so many years and won’t have the credits to receive Social Security. Will California Covered pay my medical expenses that would have been paid by Medicare if I were to have had the proper credits for those benefits? In other words, I didn’t pay into the system because my family’s care was more important. Thanks for your help. Email is:

Maxx Thank you so much for the comprehensive answer. So I guess in case we need to go to the doctor’s office or get test or medicine there would not likely bills for our sponsor. I hope sooner we will keep up with the average family income in California and pay for the premium so no worries about the billing to the sponsor for such costs. Again thanks for your time and respons & wish the best of prosperity for you. Also I appreciate this website’s admin for providing us with such a great environment to inform the public.

Haluk …

You misunderstand. Your sponsor will not receive the bill for your healthcare … at least not initially. If your income is such that you are eligible for Medi-Cal (<138% of the Federal Poverty Level = $16,105 or less in 2014), you are not creating any direct obligation for your sponsor. All persons with legal immigration status are eligible for, and required to have, one form of “minimum essential coverage” — either employer-sponsored, individual insurance, or be enrolled in Medicaid/Medi-Cal (or participate in certain faith-based “plans”).

As legal permanent resident aliens, however, the expectation when your visa was granted, thanks to the voucher by your relative, was that you will become productive members of American society, and that you simply did not come to the US with the intent to do otherwise. If you were to run up large bills — medical or otherwise — and attempt to avoid them by filing for bankruptcy, however, that’s when your sponsor could become liable for your debts.

This would not be likely to happen as a Medi-Cal beneficiary. there is a requirement imposed on the state to seek “asset recovery” following the death of a person who has received coverage for expenses related to “institutionalization” while under age 55, and for payments made for essentially all heatlh care after age 65, but if a person has no assets, there is nothing the state can recover.

In some very unusual circumstances, the children of a Medicaid/Medi-Cal beneficiary have been held liable for their parent’s asset recovery, and those same circumstances could apply to the sponsor of a LPR. Complex situations such as this are the exception, not the rule.

Sorry I didn’t know where to ask my long story & question.

My sister 56 & I 42, migrated from Turkey to the US in 2012 and have been living in California as LPR since. We had to find someone to be our sponsor and a far relative was kind to do this favor, sign & send the form i864 to national visa center so we were granted the visa & entry to the US. In that time there wasn’t obamacare in effect.

In 2014 in the fear of not get penalties for not having medical insurance, we applied on coveredCA website and 2 months after that recieved letters stating that we are eligible for free medi-cal along BICs. Although we are still low income but never asked for governmental aid or subsidies, stamps, etc nor plan to do in the future. If we realy get stuck in the financially bad situation for medical costs, we’ll leave and return to the Turkey rather than hear that the kind sponsor suddenly faced with a big bill.

what prevents us going to doctor or pharmacy in case, is that if they bill our medical costs to our sponsor later! If that happens would be so embarrassing for us. Will they bill him later? What’s the procedures under new law in our case? thank you so much

Tom C …

When I work with a client who is self-employed and whose income is irregular/inconsistent from month-to-month, if he/she is eligible for any amount of premium tax credits, I first urge them to not take them in advance at all, if the premium for their chosen health plan is within their means to begin with.

If, however, they need the help from Uncle Sam to pay premiums, then I recommend that they accept no more than 50% - 75% of what CoveredCA estimates their monthly tax credits to be. By doing this, it gives breathing room to earn more money, and lessens the risk of having to repay any credits, or minimizes the amount of credits to be repaid.

If their income ends up as projected or less, then they will receive the balance of unused tax credits as a refund (or applied to any unpaid tax owed).

Tom, If you earn more than projected, you will have to pay IRS back some or all of the subsidies you are paid, depending on your income level.

If you earn less than projected, you may be entitled to a refund on your taxes, up to the amount of subsidies that you could have otherwise collected.

I have found it easiest to simply enter numbers that are roughly the same as the last tax return I filed — that way, the numbers were quickly verified by the system.

Once you are approved for a subsidy, you do not have to take the full subsidy — you can opt to take no subsidy at all, or you can opt to take a partial subsidy — and then collect the balance, if you are entitled to it, through a tax refund later on.

I think that for the self-employed, it may help to look a this as a business cash flow decision rather than solely has a health insurance decision.

I am confused. I am applying for the first time at the coveredca website. For income, it says “Enter your projected income for the year in which this health plan will be effective. “

I am self-employed. What happens if I make over what I project and I don’t know about it till the end of 2016 - when I do my taxes?

What happens if I underestimate and find my income goes over some income level that says I should have paid more?

Saly …

First, you don’t mention what your age is. If over 55, then, yes, theoretically, the State of California is entitled to come after you for repayment of the medical expenses paid on your behalf. They would have to first file a lien against the property from which they want to collect that money — typically, a person’s home. But the state may lawfully come after ANY countable asset, such as an automobile, bank account, life insurance or annuity cash value (unless the annuity is already in the distribution phase), even stocks, bonds, or mutual funds.

As long as you are living in the home, they will NOT take any action against it. But if you attempt to sell or transfer the property, and a lien was filed, it will have to be released before the property can change hands. You could repay the money owed with separate funds, or someone else could pay that amount on your behalf.

If the state fails to file a lien, the sale of your home would be unencumbered, but the state could still come after you or your “estate” for the unpaid amount. They cannot come after your heirs unless the heirs have taken possession of certain of your countable assets within the 60 months preceding your initial eligibility for Medi-Cal.

If you’re over 19 and under 55, there may not be a problem at all, because under age 55, asset recovery is only applicable to expenses paid for “institutional” care (i.e., nursing facilities, a).

Mr. Herr, thanks for all your time devoted to this topic.

I have been on California Medi-cal the past year and understand that the state will recover the cost of my participation in Medi-cal from any assets available upon my death.

What happens if I sell my primary home in CA?

Do you know if the State of California will try to collect from the sale of that home when I move out of state or will they still wait until I die?

The phone number on the DHCS is slightly different, but there is also an email address:

For general information, please email Estate Recovery at er@dhcs.ca.gov, or call (916) 650-0590.

Hope this helps.

Thank you Mr. Herr. This info was quite helpful for me. I do have another question regarding the Estate Recovery program. Do you know how one gets an itemized bill, either monthly or yearly, while the Medi-Cal beneficiary is still alive? I tried calling the number given in my DHCS letter (916-650-0490) but it’s only a recording. You can’t get a live person. The info given is basically for your heirs to pay up. I would like to get a running total to make sure the my expenses are correct. My heirs can’t ask me when I’m dead if the accounting is correct.

While doing some unrelated research, I ran across a third-party document that has information on qualifications for MAGI and Non-MAGI Medi-Cal eligibility/enrollment that might be beneficial to persons such as Teresa and B Lee. Because the document has an issue date in early 2014, some of the links embedded in the document are no longer working, but, otherwise, the information appears to be accurate, well-organized and ordered, and may prove beneficial to some persons.

Find the document here: http://www.disabilityrightsca.org/pubs/555001.pdf

B. Lee … were you disenrolled from your Silver 94 health plan? If so, you could call CoveredCA (800-300-1506) and report an income increase to get you back between 139% and 149%, and the CSR can get you reenrolled. If you were not disenrolled, you should call anyway and bump your income up a bit.

I was originally on the Silver 94 plan as my estimated income was $1810 mo/$21,720 yr. Based on the income guideline I was in the 138+% by $11. However, in July I was notified by Social Service (S.S.) that I now qualified for Medi-Cal. I was told that Medi-Cal calculates differently and I fell at 138%, not 138+%. Do you know how S.S. calculates income? Why have these income guidelines if Medi-Cal doesn’t follow them? Also, I think I’ll be over my estimated annual income by a couple of hundred but I won’t know for sure until I file my taxes in late March, early April. Will I have to wait until then to get off Medi-Cal or can I make an adjusted income in December to get back on the Silver 94 plan? Thank you for your time.

If it is not allowed, then the California social workers have not been informed. They are still assigning share-cost to new Medi-Cal recipients who are referred back to and assigned Medi-Cal via California Covered. I fall into the category of qualifying for Medi-Cal retroactively a year before California Covered insurance took effect, but others —new to the program of Medi-Cal— are still being assessed a share cost when their income is above the poverty level income (and +%) allowed for Medi-Cal but under the income level required for California Covered.

Freelancer … while your comment about share of cost is generally correct, Teresa has been on Medi-Cal longer than just 2014, has one or two children covered under Medi-Cal, and is also over age 55, so her particular circumstances are rather unique. Plus, none of us knows the real details of her situation so it’s difficult to give her more specific information.

I just want to reiterate — “share of cost” for Medi-Cal does not apply to the people who receive Medi-Cal via a Covered California referral — that is, those whose income falls below the minimum to qualify for subsidies.

“Share of Cost” Medi-Cal was a program created for low income people who did not otherwise qualify for Medi-Cal under rules in place prior to ACA, and may still apply to people who are not eligible via Covered California - for example, older individuals who qualify for both Medicare and Medi-Cal.

Most Medi-Cal recipients are assigned to managed care policies, and in some cases there may be moderate co-pays required for service.

Teresa wrote: “A clinic where I make monthly payments does not know how to submit my share cost to Medi-Cal.”

If that’s true, then the clinic is probably NOT a Medi-Cal participating provider, and that’s going to make things more difficult.

“The social workers who handle Medi-Cal in LA County are so overburdened that they are not allowed to answer phone calls anymore. They do not answer letters and have not responded to my request for a place to report my payments.”

I have a different thought: The DPSS [SEIU union] employees are deliberately slowing down the process for only one reason — job security. I do not doubt you are having the trouble you indicate.

“Since estate recovery will take back any amount of money that they pay out for my medical care, why would I want that kind of coverage? I’d rather pay a premium I can afford and have real “insurance”. Medi-Cal with estate recovery is simply a way for the state to lend me money in advance so I can pay full cost for medical care — money they will recover at full cost from my assets when I die. (Granted, the state is taking the chance that I will have money left to recover.) BUT, if I have insurance via California Covered at the lowest level, then with the exception of monthly payments, co-pay and deductible (needed only if I get really sick)”

You misunderstand the economics of health insurance under Obamacare. Especially in your understanding of what the “lowest level” (BRONZE) plan will do for (or, to) you. Paying “$100 per month” for insurance premiums in a BRONZE or standard SILVER plan does nothing to account for the THOUSANDS OF DOLLARS of out-of-pocket costs not covered until you satisfy the deductible.

Before you derive any true benefit from a BRONZE plan, other than “preventive” care (which is no cost sharing in all plans), you must pay ALL of your first-dollar expenses up to $5,000 per year. Then you have another $1,350 in out-of-pocket shared expenses (copays and coinsurance) until you reach the individual out-of-pocket limit known as the “stop loss”. $356 x 12 = $4272, a savings of $3278 ($100 x 12 + #2078). The numbers for 2015 will be different and higher.

You also are exposed to the $12,700 FAMILY MAXIMUM out-of-pocket expense including at least $5000 in deductibles for your children — since you have two children, your household could reach the $12,700 OOP limit without anyone ever reaching the $5000 individual deductible. How’s that for “real insurance”?? Can you afford that?

What some would call “real insurance” under Obamacare/CoveredCA begins with the GOLD plans — NOT BRONZE or SILVER. However, the SILVER cost-sharing plans, for persons whose incomes are below 250% FPL, come much closer.

The SILVER 94 plans (income between 138% and 150% FPL [HINT HINT] are actually more beneficial than either GOLD or PLATINUM. If your income is between 138% and 150% FPL HINT HINT.

“Medi-Cal with estate recovery is simply a way for the state to lend me money in advance so I can pay full cost for medical care — money they will recover at full cost from my assets when I die.”

DING! DING! DING! You have learned something most people don’t know. However, asset recovery is FORCED on the state under federal law, it is not something exclusive to California. Truth be told, if it were up to the California legislature to make the rules, it would probably be WORSE than that.

“BUT, if I have insurance via California Covered at the lowest level, then with the exception of monthly payments, co-pay and deductible (needed only if I get really sick) at least my assets are protected.”

Reread the bit about the economics of Obamacare above. You may not be subject to asset recovery, but with a BRONZE (lowest level) plan, and your stated health challenges, you will likely end up bankrupt and have nothing left to leave to your children WHILE YOU ARE STILL ALIVE.

“If California covered allows me coverage at under $100 a month, how does Medi-Cal figure that I can come up with $356 a month? It makes no sense.”

Again, you do not understand the economics of Obamacare. Medi-Cal, even with cost sharing AND ASSET RECOVERY, may be a better solution in your current financial situation.

If, instead, you teach your children to become highly profitable entrepreneurs and not someone else’s employees, they will probably not be concerned one iota about what you do or don’t have to leave behind for them — they will be busy running their own businesses and doing OK on their own.

“Also, the state / Medi-Cal doesn’t tell us how much money was billed or paid for care. There is no bill as in a regular hospital billing. There is only a bill asking for my share of cost, $356. If it’s under, I am asked to pay cash at time of services rendered. It’s like the state has a secret system going and it really bothers me.”

If you are so “really bother[ed]” by all of this, I have a suggestion for you and most everyone else: STOP ELECTING DEMOCRATS TO LOCAL, STATE, AND FEDERAL OFFICES I don’t care who else you vote for — independents, republicans, peace and freedom, green, tea party — anything/anyone else can’t be worse than what we already have.

“I am not one to incur debt without really thinking it through, so while Medi-Cal is better than no insurance, at my age I would much prefer California Covered genuine insurance over Medi-Cal at 55 with share cost and recovery via my estate.”

Once you understand the economics of Obamacare in relation to your personal situation, you may have a different opinion.

Please don’t take this final comment the wrong way. I know you are concerned about today, tomorrow, next year, and, ultimately, the future financial well-being of your family and your children after you depart this earth, and I wish you all the best. But have you ever talked with your children about your current assets and whether they would even want them? I’m just saying …

Thank you for this information. Along with the income level tables, the info you provided below is exactly what I needed to hear. I’ll tell you why:

With my income at the higher end of “poverty level”, I owe $356 “share cost” for every month I use Medi-Cal (that sounds like a lot, but I have a friend is responsible for the first $1000 per month share cost so I feel lucky!) More clearly: Per month, all medical costs under and up to $356 are my responsibility. I am not chronically ill, but with the cost of medical care, just about any visit and test comes to far over that amount. At my income level I simply don’t have that much to spend every month, so I don’t go to the doctor if I can avoid it. As well, and as far as I can figure it, there is no way for me to report my payments unless I go to a county hospital or large clinic for services (county hospitals offer great care but a person can spend many hours and sometimes days waiting… there is no appointment system.) A clinic where I make monthly payments does not know how to submit my share cost to Medi-Cal. The social workers who handle Medi-Cal in LA County are so overburdened that they are not allowed to answer phone calls anymore. They do not answer letters and have not responded to my request for a place to report my payments. I can’t find anywhere online where I would report my payments. Visiting the welfare office can be an all day event, and still, a person might not get the information they seek. Frustrating!

For those under 55, Medi-Cal seems like a good deal because there is no repay. The caveat, however, is that it is difficult to find a doctor who takes Medi-Cal and is not in a really bad neighborhood. I lucked out and found a new clinic near my home. They needed to build up the customer base so they accepted me (the billing clerk made it very clear to me that they wouldn’t normally accept new Medi-Cal patients.) I have a very young doctor but in this case I’m ok with it. At least I have a primary care physician who is nearby.

Back to insurance… At the lowest level of California Covered, I will owe a minimum payment per month (maybe under $100, like a retired friend of mine) along with a co-pay. The difference between $100 a month and $356 a month is vast for someone (like me) who doesn’t have a lot of money. Since estate recovery will take back any amount of money that they pay out for my medical care, why would I want that kind of coverage? I’d rather pay a premium I can afford and have real “insurance”.

Medi-Cal with estate recovery is simply a way for the state to lend me money in advance so I can pay full cost for medical care — money they will recover at full cost from my assets when I die. (Granted, the state is taking the chance that I will have money left to recover.) BUT, if I have insurance via California Covered at the lowest level, then with the exception of monthly payments, co-pay and deductible (needed only if I get really sick) at least my assets are protected. Hopefully I will then have something to leave my kids.

Also, the state / Medi-Cal doesn’t tell us how much money was billed or paid for care. There is no bill as in a regular hospital billing. There is only a bill asking for my share of cost, $356. If it’s under, I am asked to pay cash at time of services rendered. It’s like the state has a secret system going and it really bothers me. It’s akin to a contract being amended after signing, with no notice of the amendment and no possibility of rejecting it. I am not one to incur debt without really thinking it through, so while Medi-Cal is better than no insurance, at my age I would much prefer California Covered genuine insurance over Medi-Cal at 55 with share cost and recovery via my estate.

Additionally (I know I’m long winded here) there is a huge gap between what the state calls “poverty level income” (which is calculated at an early ’80’s level) and the lowest income that qualifies a person for California Covered. If California covered allows me coverage at under $100 a month, how does Medi-Cal figure that I can come up with $356 a month? It makes no sense. The figures need to line up with each other — with no gap!

Thanks again for the info below. This is very helpful, as was all the other info I have gotten here on cahba.com.

Max, if a person overstates their anticipated income, there is no clawback — the clawback (paying money back) only happens if the person understates their income.

So no money owed to IRS.

If a person estimates that their income is high enough to allow purchase via the exchange (over 100% of FPL in non-expansion states, over 138% of FPL in California) - and the exchange confirms their eligibility and allows the purchase of the subsidized policy — and then it turns out that the taxpayer actually has earnings (or a combination of earnings and deductions) that leaves an adjusted income of under the FPL — the law specifies that credit will be calculated as if the income was exactly 100% of FPL.

So if Teresa estimates her earnings for 2015 to be at 138% of FPL — and instead the earnings are far short of that— (let’s say only 50% of FPL) — come tax time her credit will be calculated at 100% FPL and she will have a small refund from IRS — NOT money she has to pay back.

This is especially beneficial for self-employed, because it means that she does not have to be afraid to write off legitimate work-related expenses for fear that her income comes out too low.

Teresa already said that her income fluctuates, which is why she (and many self-employed) are in a position that we may have a fairly broad range of figures that are legitimate to provide when it comes to giving an estimate for the next year’s income, between best case and worst case scenarios for the coming year.

But again, there is NO tax penalty or clawback for anyone who overestimates their income.

Freelancer wrote: “you can be as optimistic as you need to be in your estimates for anticipated 2015 income.”

While this is not incorrect, it is not all the information you need. The day of reckoning will come in 2016, when you file your 2015 federal income tax return. Your income and any premium tax credits will be “reconciled” and you may have to repay tax credits that you were not entitled to receive.

If you have to repay the credits but don’t have the money to do so, you will be facing major tax penalties and interest, and it can take a dreadfully long time to climb out from under that rock, because the IRS adds new interest on a monthly basis, even when you are making payments based on a negotiated repayment agreement.

Get professional tax advice BEFORE you make a possible “optimistic” mistake … because tax credits can be denied to persons who are “eligible” for enrollment in Medi-Cal.

Teresa, The income limits are based on the federal poverty guidelines — here’s a chart showing what they are for 2014 (which will correspond to the next open enrollment period):

http://familiesusa.org/product/federal-poverty-guidelines

It will be $11,670 for a one person household and $15,730 for two.

It isn’t based on what you made the previous year— it is based on what you think that you are going to make in the coming year.

Since you are self-employed it shouldn’t be a big problem - you can be as optimistic as you need to be in your estimates for anticipated 2015 income.

Thank you — I guess what I am asking for is the income limit for Medi-Cal vs. California Covered. I am only 57. My income has been reduced dramatically over the past years along changes in our economy. I am hoping that with an increase in income I will qualify for California Covered this next enrollment period. I don’t have a fixed income. I am self-employed and things change from year to year, both income and expenses.

Are you allowed to share the dollar amount of the lowest income that qualifies an individual and/or family for California Covered? Or can you tell me where I can find that information for: 1.) a single person 2.) a single person with one dependent

Thank you —

Teresa …

Let’s try this bit by bit.

1) The “Special Enrollment Period” is a limited opportunity for certain persons with qualifying events (marriage, birth/adoption of a child, loss of employment, and several others) to enroll in a Qualified Health Plan. It would not be applicable to your situation.

2) If your household income is below the 138% FPL threshold, and you do not wish to be enrolled in Medi-Cal, you will have to apply for coverage off the exchange, because you will remain “eligible” for Medi-Cal through CoveredCA and cannot receive premium tax credits to help pay the cost of insurance. 2a) There is no charge for this — it is entirely against the law for any agent to charge you or anyone else a fee to submit an insurance application. 2b) You can click on my name (above) which links to my website and there you will find my contact information and even a page where you can send me a message directly.

3) When you had your surgical procedure, if the bill was covered by Medi-Cal, it makes no difference where your procedure was performed, there are specific reimbursements for specific procedures, and hospitals and doctors/surgeons actually get pennies on the dollar for their services … so you don’t have all that much to worry about.

4) Cash paying patients should be able to obtain services by simply negotiating the charges at (or close to) the contracted rates service providers receive from HMOs, PPOs, or Medi-Cal for their services.

5) You, like many other Americans, have fallen victim to the misinformation, misrepresentations, and other lies the politicians told (and the copycat news media reported) to get the public to believe that health care costs would come down, be affordable, and provide lots of “free” things. Most of the politicians knew the truth and chose to keep it hidden.

The only real problem that existed prior to passage of the PPACA concerned the 40+ million persons in America who had no health insurance at all. The PPACA opened the door to about 1/4 of them by allowing persons age 19-64 into Medicaid (Medi-Cal) based solely on income and without an asset test.

I don’t know the pertinent details of your situation, even though you’ve posted several times, but I was able to surmise early on that you are probably over age 55. And if you read the last post in this thread — one I wrote on January 9, 2014 — you will see quoted material from HHS that sort of gives the “Cliff Notes” version of the rules for asset recoveries. There’s a lot more to this as you drill into the subject.

The long and the short of it is pretty simple: the federal government will cover your bills, but if you have an remaining resources when you die, the government will come looking for them to be repaid for what it spent on your behalf. They’ll find your home, your savings, your stocks and bonds and other investments, they might even find some of your gold jewelry. The fallacy is that nothing comes to you (or others) for free … and we all know that “payback is a B**!”

5) Your final question is “what can I do so that I qualify for California Covered instead of Medi-Cal” and the answer is nothing. As I mentioned above, because you are Medi-Cal eligible (whether you remain in the program or not), you cannot receive assistance with the cost of health insurance — you have to pay 100% of the premium. You can leave your children on Medi-Cal if you wish.

But to obtain your own health insurance, you will have to select a plan off the exchange, and premiums for BRONZE level plans for persons over age 55 are in the $500-$600 per month range (same price on/off the exchange for the participating carriers).

This may be well above your budget. And that leaves you in the proverbial position between a rock and a hard place. Obama and the Democrats never had a plan for that — they only wanted you on Medi-Cal so you would think they were actually helping you.

Now that you know the truth, you may register your complaint appropriately in the voting booth in November, two weeks before open enrollment begins.

I have written here before and continue to get email responses to the original posts about Medi-Cal Estate Recovery Program.

Mr. Herr — What is the “Special Enrollment Period”, and if I am already on Medi-Cal, how do I apply for a California Covered “health plan during open enrollment (beginning November 15).” I opened an account online but was already on Medi-Cal when California Covered began. The state kept me on Medi-Cal. When I read about the man whose accrued debt to state will be $568/month + admin. fees + 7%, it scared me! That kind of debt will quickly eat up any principal I have in the only thing I own, my home! I have two children, a low income, and would like to leave them at least something! I have decided that I need to rid myself of Medi-Cal ASAP.

My situation is complicated by the fact that I have a 21-year-old daughter who lives at home and has no income. This increases my family size and decreases the income requirement for Medi-Cal.

Also, Herr Herr :-) How do I find someone to help me navigate through this, and is there a fee for the assistance?

I had an operation for a broken wrist at age 55 which was covered retroactively by Medi-Cal. Because it was done at a county facility, the amount billed is surely much more than it would have been had I gone to a private hospital. Near the end of my treatment I was sent to the physical therapist. When he learned that I was a cash patient he told me that the county hospital billings were astronomical compared to a private physical therapist billing, and advised that I did not need to come for further appointments as it would be cost prohibitive as a cash patient and would not make much difference in my recovery.

The whole Medi-Cal thing is now making me sick to my stomach… I just want to get on a health insurance plan of some kind — anything that meets the state requirement and covers me for emergencies. I can’t afford to to live if I get sick, but I can’t afford to cover myself and protect my family in case I get sick. Hard to believe!

Instead of Medi-Cal, I’d rather qualify for the lowest level of care, die of whatever ails me and then leave something to my dependents so they can have a better life. This is my America! I feel like I have to apologize for being a single divorced woman who doesn’t make as much money as the state would like me to. For the record, I am not on welfare other than Medi-Cal. :-(

In any case, what can I do so that I qualify for California Covered instead of Medi-Cal. Where do I go? It seems close to the time that I should prepare for this. Thank you Mr. Herr.

The asset recovery rules under Medicaid (Medi-Cal) require that any assets placed in a trust, irrevocable or not, must have been placed at least 60 months prior to the application for Medicaid to be considered “exempt” from recovery.

This is known as the “lookback” provision, which is intended to prevent the unlawful transfer of assets solely to qualify for Medicaid.

Your question is also a bit of a misnomer. Assets placed in an irrevocable trust, unless done so fraudulently (with intent to qualify for Medicaid), are generally not recoverable from the trust. BUT! that does not exempt the VALUE of the asset(s) from either asset recovery or the Medicaid spend down test, which a person must satisfy when seeking assistance with the cost of long-term care expenses. This could force the sale of certain trust assets to repay the state for its Medicaid expenditures.

And that’s where the trouble lies. Anything normally not exempt from asset recovery or the spend down test placed in trust within 60 months is still counted on paper as non-exempt and the VALUE is subject to recovery or must be spent down to the maximum allowable amount for the confined spouse/person ($2000 “countable”).

How do you spend money you do not have? That’s where the transfer of assets comes back to bite a person in the wallet (or the part of their anatomy closest to it).

Is it true that Medi-cal cannot recover assets that are a irrevocable trust

Exacto … I understand your concern. If you had enrolled with the assistance of an insurance agent, you might have been given that information in advance. I know I would have given you that information.

If you did receive application assistance from an Agent, Navigator or Assister who failed to inform you of the Medicaid Asset Recovery requirement, it’s possible that you might be able to formally appeal your Medi-Cal enrollment on the basis of material concealment/misrepresentation … however, because we are now in August and you were informed of this in April, you are well beyond the 90-day window to appeal, and like any other “statute of limitations”, once the window closes you generally cannot reopen it.

I guess you can continue to sit on your hands and hope Jerry Brown has mercy on age 55+ Californians who are on Medi-Cal — but that, too, is unlikely, because those persons aren’t major contributors to his reelection campaign like the public employee unions are.

Still, as I’ve previously said, if you are able to disenroll from Medi-Cal now, you will not qualify for premium tax credits under federal law because of your income-eligibility for Medi-Cal, and will have to pay 100% of the premiums for the balance of 2014.

You will be able to disenroll from Medi-Cal for 2015. But if your income is still within the 138% FPL range in 2015, you will continue to have to pay 100% of the premiums.

So unless you can increase your household income above 138% FPL, your dilemma remains paying premiums now (which will certainly be more than $568 per month) or allowing the state to recover those premiums after you’re dead. Understand that the amount Medi-Cal wants to recover can be repaid by anyone. And they will really only come after a home — the one asset that probably is worth most or all of the amount subject to recovery.

You could begin setting aside cash for your heirs to use for that purpose or purchase a survivor life insurance policy to provide that same funding (but life insurance will probably be more expensive than health insurance).

The problem with either of those possibilities, however, is that they are problematic: cash in excess of the $2000 asset limit, or life insurance cash value in excess of $1500 must be used to pay a person’s share of cost if relying on Medi-Cal for assistance with the cost of long-term care.

Max: I read your response & I understand what you said. However, what WE object to is we were not informed BEFORE we applied to CC for health insurance. We both were approved & received our BIC cards. Then we were sent the paperwork to fill out for 1 of us (he’s not a citizen) to send in which he did in January, 2014. Then on April 1, 2014 we received the yellow sheet explaining that “The state WILL collect from his/her estate the cost of Medi-cal services received, including insurance premiums paid & payments made to managed care plans, On or AFTER his/her 55th birthday”. I have since done some investigation & found out that these fees are $568/month + admin. fees + 7%!!! We now pay out of pocket for going to the doctor/dentist and it doesn’t even come close to these fees. This is what they are getting now for the fees - who knows what the admin fees & interest will be 10-20 years from now. These managed health care companies are going to be making out the best - not the beneficiaries who will get stuck with the bill when the insured dies. NOT RIGHT!!! That is why there is SB 1124 that those who know about it are hoping Governor Brown will sign if it goes through the legislature. We should have been made aware up front about the medi-cal estate recovery program - not after the enrollment period!

Exacto …

Medi-Cal beneficiaries are only subject to asset recovery for institutional care expenses prior to age 55, and for all health care expenses after age 55, primarily those for long-term care. You are not forced to use Medi-Cal to pay those expenses, you can use your own cash. Problem is, most people whose incomes are less than 138% of the federal poverty level don’t have much cash on hand or in savings or investments.

As for “getting off” Medi-Cal, you can’t enroll in a health insurance plan and receive premium tax credits if your household income is at or below 138% of the federal poverty level, because that makes you eligible for a federally sponsored health benefit plan. If you could enroll, you would have to pay 100% of the premium with your own money.

The technical reason why you cannot simply “get off” Medi-Cal at this point in time is not some sort of statewide “problem” or conspiracy, it is that you would be without health insurance, and you would not be qualified for a Special Enrollment Period, and would have to wait until January 1 for new coverage to become effective (you could enroll in a health plan during open enrollment beginning November 15).

This is FYI. I have been trying since April, 2014 to get off of medi-cal through the ACA. I was informed yesterday by the medi-cal customer service line in LA that once you have been approved for Medi-cal through covered california you CAN NOT be taken off. The language that Miss Bursey used per her supervisor, Mr. Ortega: “Once you have been approved for medi-cal the system does not allow any negative action to be taken such as cancellation”. I was told that this problem is state wide & when the program was designed they did not anticipate people would want off because of the medi-cal estate recovery program. I was also told that they have documented what I have said in my phone calls & they have been recorded. I also sent a letter as requested to be taken off. She told me not to use the medi-cal card or the managed health care plan they put me in. Miss Bursey did not know of this problem & said she has cancelled many for this reason & now realized they in fact have not been cancelled out of medi-cal. She was just one out of many who have been taking calls to be cancelled off of medi-cal.

Steve … one who is enrolled in Medi-Cal cannot receive the tax credits — period. There is a difference between being “eligible” (aka “qualified”) for Medi-Cal and being “enrolled” in Medi-Cal. Just ask my 15 or 20 Medi-Cal eligibles in Los Angeles County whose applications from as far back as last November, December, or January, still have not been “enrolled” because LA County DPSS eligibility workers are taking their sweet time to work on the applications. Job security by slowing down the system.

But the PPACA is written, and the IRC follows, that any taxpayer whose household income is between 100% and 400% of Federal Poverty Level AND who purchases health insurance through the exchange can receive premium tax credits.

However, advance credits are only provided to those whose incomes are more than 138% of FPL (in CA and about 16 other states + DC — 133% in the majority of states which did not choose to “expand” Medicaid eligibility).

So a person can voluntarily reject “assistance paying for health insurance”, pay the full cost of the insurance, and claim the tax credit at tax filing time the following year. Like most other tax credits, it is “fully refundable”, which means that it will first reduce any income tax liability dollar-for-dollar, then any remaining amount of credit after tax liability reaches $0 is refunded to the taxpayer (or may be applied as a credit toward next year’s taxes).

You can find basic information about all the various PPACA tax provisions in the IRC here (with links to more details): http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

Max,

Do you have a citation that one who qualifies for Medi-Cal can take the Tax Credit when they file?

Steve

I meant to add one thing about Medi-Cal share-of-cost. A 2010 report found that share-of-cost beneficiaries were only about 1 percent of all Medi-Cal beneficiaries, but their medical expenses paid for by Medi-Cal were a disproportionate 15 percent of all Medi-Cal expenses. Most of these persons were age 55 and older and in need of long-term care.

Freelancer …

Yes, I know that share-of-cost is not the same as asset recovery. They are, however, interconnected for some folks. In Teresa’s case, because she is over 55, she is subject to both. Her share-of-cost predates 1-1-2014, and she may simply need to appeal her eligibility determination.

The other issue is that it was not clearly articulated, to applicants or agents, that a person who would otherwise be eligible for Medi-Cal could reject that by accepting the fact that they could not receive advance premium tax credits to help cover the cost of a health insurance plan. Those with incomes at least 100% of FPL would still be able to claim the tax credits after-the-fact as a refund when they file their tax return the following year. It’s unclear whether they would receive the cost-sharing reduction (Silver 94) that persons with incomes between 138%-150% of FPL receive.

Teresa, what county are you in.

The web site I quoted from before made it clear that share-of-cost was eliminated with the implementation of ACA.

Max: “share of cost” is different than “asset recovery”. “Share of cost” was essentially a monthly deductible that applied before Medi-Cal would pay benefits before ACA— it was way of providing coverage through partial benefits for individuals whose income was too high to qualify under the old standards.

Teresa … you still have not clarified the reason for Medi-Cal in your situation. I’m not even going to attempt to discuss your “friend” and his situation, since that sounds completely wrong.

As several of us commented a month ago, it appears that your Medi-Cal eligibility may have something to do with long-term care, and possibly for persons over age 55, since your Medi-Cal predates 1-1-2014, when most persons between ages 19 and 64 were ineligible.

You may not want to discuss the details of your situation in a public forum like this, which is fine. You can email me and discuss your situation confidentially. max.herr@verizon.net

Ok, I am confused. Are you saying that if we entered the Californa Medi-Cal system prior to the inception of National Healthcare (Obamacare to some) rather than qualifying for Medi-Cal through California Covered, then we are part of a group who remains in the ShareCost program of Medical… As opposed to those who were entered into the California Medi-Cal system qualified by California covered, then this new group of folks qualified by California Covered are exempt from share cost? Because that is somehow not quite right… A friend of mine who was entered into Medi-Cal (routed via the California Covered site) and he has a $1,000 per month share cost. I was entered a year before and I have a $356 a month share cost. This is all a bit strange — both of us would prefer to pay a low rate of health insurance, but we have been denied and forced to use Medi-Cal (because our income is too low but we can afford $357 to $1000 a month? HUH??) or pay the outrageous premiums that we both can’t afford. We are both 57, my friend still has a child at and elderly mother at home, is self employed as a gardener and after deductions his income is roughly $13K. I just don’t understand why the program was calculated this way. Anyway, if you believe that share cost has ended, can you please direct me to someone I can talk to who will correct this for me? Thank you so much. :-)

Teresa wrote: “Not all Medi-Cal is free.”

From her continued comments, I think she and her husband must be age 55 or older, and her point is well taken. For those persons, Medi-Cal resembles a “no interest loan” that will be recovered by the state (it is forced to do so under federal law because the federal government provides most of the money to pay health care expenses under Medicaid) from the estate of the deceased beneficiary (or their spouse’s estated when the spouse later dies).

Nothing is truly free — there is always a “catch”. This is just another one that most people fail to realize even exists … until it affects them personally. At that point, it’s too late.

Those of us who are agents know all too well that the person who waits to purchase insurance until they have a need, has waited at least one day too long to try to get the insurance.

Teresa — it sounds like you have been on Medi-Cal since some time prior to 2014. The “share of cost” provisions (which are different from the estate recovery) would not apply to people coming onto Medi-Cal via the exchange expansion.

Here’s a quote from another web site explaining this: In raising the minimum income level, the ACA also eliminates shares of cost for many Medi-Cal and other lower-income patients. The share of cost program applies to those above the minimum income level who still qualify as low income, holding these patients financially responsible for a share of their medical expenses. However, this means that even those who were at 61% of the federal poverty line were forced to pay a share of cost, which is applied before Medi-Cal payment covers the remaining cost of care.[i]5 With the ACA, any individual or household earning up to 133% of the federal poverty line, currently $15,130 per year for a family of two or $1260 a month, will no longer have to pay healthcare costs.

Source: http://www.stanford.edu/group/sjph/cgi-bin/sjphsite/medi-cal-2016-what-obamacare-means-for-california-patients/

Not all Medi-Cal is free. There is a thing called “share-cost” and it can be quite expensive… $356 a month for me in each month I use it, and over $700 a month for a friend who qualified. Both of us would prefer a subsidized insurance plan but we were told that if we did not accept medi-cal, then we would receive no assistance at all. There is a gap between the income allowed for Medi-Cal and the income required for subsidized insurance. The closer the income in that gap comes to the required lowest income for subsidized health insurance, the higher the share cost. Imagine being low income and instead of paying the insurance premium we are faced with huge monthly costs if medical care is needed. It’s just strange, because on the subsidized plan the meager estate that we have would not be touched, but with the Medi-Cal plan the cost of care is added up and collected from our estate at death. That would quickly wipe out anything a person might leave to their heirs. I’m not saying that things should be free… I’m suggesting that this plan is somehow out of balance. National Health Insurance (Obamacare? Why do they call it that!) and Medi-Cal need to shake hands and get on the same page with income requirements so the program can be fair to all enrolled.

Hello I agree California needs to modify it’s current state law. As you know long term care recovery is actually all that is mandated under federal law. I have contacted the White House, and my state representatives. I have been told that the states are actually going to define this subject sometime after Jan 2014.

The new medi cal application doesn’t even ask for assets like it used to. It is entirely based on annual income. I bet that there are many people who became eligible under ACA don’t even know about the estate recovery. That in it’s self is deceptive.

Asset recovery is mandated under federal law. California formerly only recovered long term care expenses, and yes, theoretically, they could return to that position. But there is no incentive to do so. Every dollar recovered is a renewed dollar that can be respent in addition to all the new dollars allocated each year.

Unless the federal government ends the mandate, little will change. California’s legislature will soon be considering a bill to extend pseudo-Medi-Cal benefits to illegal aliens, and that money must come only from state resources. Giving up recovered assets which could fund some of the benefits for newly eligible Medi-Cal beneficiaries means more state dollars will have to be committed to actual Medi-Cal beneficiaries, and leave the state unable to afford paying the bills of illegal aliens without extracting new taxes or impairing general fund expendtures, or both.

California is embarking on a path of trying to mirror the federal government’s be-all-and-do-all-for-all which is wrecking the national economy. California, unfortunately, cannot print its own currency to pay the bills.

Actually, I think it would be far more effective to contact our state legislators to advocate modifying California law. It’s a state law that governs the circumstances for asset recovery. The state law can and should be modified to apply only to costs for long-term care, as is being done in the state of Washington. See: http://blogs.seattletimes.com/healthcarecheckup/2013/12/16/state-will-change-asset-recovery-policy-for-medicaid-enrollees/

Deli mina? I think your not-so-smart phone meant dilemma. You cannot get tax credits to pay for health insurance because your income is too low, making you eligible for Medi-Cal, which will cost you nothing — but it will result in a tax lien against your home or other tangible asset of sufficient value, equivalent to every dollar spent on your behalf. Those, unfortunately are the rules.

Section 36b of the Internal Revenue Code indicates that the premium tax credits are “available” to “applicable taxpayers” and states that:

An applicable taxpayer is an individual who

• is part of a tax-filing unit; • is enrolled in an exchange plan; and • has household income at or above 100% of the federal poverty level (FPL), but not more than 400% FPL.

The Code goes on to explain that a person who is “eligible” for any form of “minimum essential coverage”, of which Medicare and Medicaid are two in addition to employer-sponsored benefits and several others, then you cannot receive premium tax credits. There are only a few limited exceptions, most of which are directly related to either income or a specific inability to qualify for Medicaid/Medi-Cal.

If you want to complain about this, write to Mr. Barack H. Obama, 1600 Pennsylvania Avenue, Washington, DC 20004. He might make a speech about the subject.

I am in this deli mina of being over 55 and on medi cal. I am thinking of giving it up taking my chances. Why can’t we get the subsidies that don’t have to be paid back?

Kristine wrote: “there are attorneys in CA who specialize in Elder Law and whose practices focus on helping seniors manage, transfer and spend down assets in order to qualify for or keep their Medi-Cal benefits” ++++++++++++++++++

The difference is that under ACA, there is no longer an asset qualification for Medi-Cal for people in the 55-65 age range; nor is there a choice for those people as to whether or not to accept MediCal. Federal law requires us all to have insurance, and anyone whose income is below 138% of the federal poverty line will be automatically assigned to MediCal rather than given the option to purchase a subsidized plan. (And it is unlikely that a person in that age range and income level would be able to afford an unsubsidized plan).

The laws allowing for asset recovery were written in the context of an assets test for Medicaid — it made sense that if a person could only qualify for Medicaid based on a representation that they had virtually no assets, then if it turned out later that they did have assets, there would be a mechanism for the government to recover costs.

But when the ACA did away with the assets test, it created an unfair situation which is potentially ruinous for middle-aged (not elderly) individuals who may be retired or semi-retired in part due to health problems.

You are right that there are estate planning lawyers who specialize in this, but Anne is right that there should be a legislative fix.

To Anne: if you want to see a legislative fix — then write to your state senator & assembly person! Keep in mind that the Medicaid estate recovery is mandated by federal law — the state cannot do away with it entirely. But I think the state can write laws to clarify that it applies only to traditional Medicaid, not to the ACA income-only Medicaid. That is, it really should only apply to individuals for whom an assets test applied before they qualified for aid.

Anne wrote: “They will not be able to leave their house to their children”

That may or may not be true. Anyone in the family can pay the lien so that the state will leave the home untouched.

“Why is it that those who get MediCal and are over age 55 are treated like debtors, but the rest of us are getting actual insurance?”

This is simple to answer. Medicaid/Medi-Cal is a welfare program — always has been and always will be. The government simply says, if the folks have any assets when they die, we are entitled to collect up to 100% of what we loaned to them.

Remember, the government makes the rules. But most people don’t take the time to learn them. How well would you do at poker if you thought the rules were the same as playing Old Maid?

Medicaid/Medi-Cal rules are not insidious. They are what they are — the real “problem” is that public has never paid attention to the rules because the majority are unaffected by them today. It’s only when their parents or grandparents are affected that they suddenly realize what has happened — only it may be too late to effect a change.

What is insidious is the fact that the ACA and “Obamacare” will likely result in the creation of a “single payer system” of the government. When that happens, all healthcare will be subject to asset recovery — how else will we be able to pay for it?

Pay attention to those who clamor for a single payer system. They don’t know what they are really asking for.

This thread isn’t the appropriate place or a full blown Medi-Cal and Dept. of Health Care Services recovery discussion. But as a real estate investor specializing in probate and estate issues for the past 15 years, I can assure you that there are estate planning options for those concerned about keeping the family home in the family. It’s a complicated subject, but there are attorneys in CA who specialize in Elder Law and whose practices focus on helping seniors manage, transfer and spend down assets in order to qualify for or keep their Medi-Cal benefits. There are even some viable DIY solutions such as gift deeding the principal residence away to family members. Like I said it’s a complicated subject because in addition to asset and income qualifications, there are tax considerations when selling. There is also the issue of who in the family can be trusted to manage the assets if they are deeded away.

Canhr.org has many helpful articles and case law info on this very topic.

That is insidious. It would really have been a good thing to inform all of those people who are signing up for MediCal under the expansion (especially since the means testing was dropped) that if they are over 55, that they are not signing up for real insurance, they are signing up for a type of loan that will go into collection once they die. They should be aware that, should they utilize any services of significant cost, it’s likely that they will be leaving their houses and other assets to the state in order to repay the debt. They will not be able to leave their house to their children. Why is it that those who get MediCal and are over age 55 are treated like debtors, but the rest of us are getting actual insurance? This is an absolute disgrace. To those who argue that MediCal recipients don’t pay premiums, what about those of us who qualified for massive subsidies and got real insurance? We’re certainly not paying full premiums for what we’re receiving, and no one will be taking our right to pass our property down to our children after we die. This is so shameful. California is better than this, or we should be. We need to pass legislation and put an end to this atrocious practice of ‘asset recovery’ from MediCal recipients.

Phil’s answer is partially incorrect (or incomplete).

Asset Recovery has been a part of the Medicaid program since its inception in 1965. Originally, it applied only to persons age 65 and older. Legislative changes many years ago reduced the age threshold to 55.

But asset recovery does not apply to persons under age 55 unless those persons were receiving permanent institutional care (long-term care facilities) which has been paid for in whole or in part by Medicaid (Medi-Cal in California).

Here is what HHS says:

“Recoveries may only be made from the estates of deceased recipients who were 55 or older when they received Medicaid benefits or who, regardless of age, were permanently institutionalized. However, states may exempt recipients if their only Medicaid benefit is payment of Medicare cost sharing (i.e., Medicare Part B premiums).

If a state has elected to impose TEFRA liens on recipients’ homes, then it must also recover from the estates of those recipients. States may impose liens on property of Medicaid recipients of any age if they are permanent residents of a nursing home or other medical institution, and if they are expected to pay a share of the cost of institutional care.”

California does encumber homes with TEFRA liens. However, the state will not act on a lien as long as the spouse and/or minor child of the decedent continues to reside in the home. If the home is sold, the lien must be satisfied. If the surviving spouse dies, the home will be siezed and disposed of to extinguish the lien. Any excess proceeds are returned to the decedent’s estate.

Good information can be obtained here: http://www.canhr.org/factsheets/medi-calfs/html/fsmedcalrecoveryFAQ.htm and the state Dept of Health Care Services has a two-page pamphlet available here in English: http://www.dhcs.ca.gov/services/Documents/Estate%20Recovery%20Pamphlet%20(Eng)%203-08.pdf

In cases of “third-party liability” there is a hardship waiver process, and the criteria for obtaining a waiver may be found here: www.dhcs.ca.gov/services/Documents/50963%20Substantial%20Hardship%20Criteria.pdf

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