The fear that the government could one day seize their homes is deterring some people from signing up [for Medi-cal].
Medi-Cal [Medicaid in all other states] comes with a lot of give and take. It is a safety net for those who need it, but it does come with its drawbacks. One drawback many are now discovering is “Medi-Cal Asset Recovery.”
So, what is “Medi-Cal Asset Recovery”? In layman’s terms: after you pass away the government can recoup the benefits you received from Medi-Cal by taking from your remaining assets, which usually means your house.
The Washington Post recently touched upon the new anxiety about the Medi-Cal/Medicaid Estate Recovery program in an article titled “Little-known aspect of Medicaid now causing people to avoid coverage.” Bottom line: Medi-Cal/Medicaid Asset Recovery is an important reality for families to understand.
Now, asset recovery has been a part of the Medi-Cal program for quite some time. It has been the means by which the government recoups costs for expensive Medi-Cal coverage for long-term care, at least when there was no surviving spouse or minor child involved. However, the law has expanded so states can recoup losses for any Medi-Cal benefits provided after age 55.
Since it is “Medicaid” (a shared Federal-State program), states vary in their use and tolerance of the asset recovery procedure. Nevertheless, as a family member caring for an elderly loved one it does present a potential dilemma between receiving Medi-Cal benefits and keeping the house. If the house is actually a “home” with sentimental value to the family, or even if it is a valuable property worth bequeathing, then there are many factors to consider and maybe even more alternatives to explore.
In the end, however, the care of an elderly loved one is never less important than their house or some of their other assets. On the other hand, this is a prime example of when your family should consult with an elder law attorney sooner to plan for the best financial and legal solution for your family later on.
Please visit our website for information on elder law and estate planning issues, and sign up for our free monthly e-newsletter. The archive on our website contains numerous blog posts on these legal areas as well. You can also “friend” us on Facebook (R Christine Brown) to receive periodic posts on elder law issues.
Reference: The Washington Post (January 23, 2014) “Little-known aspect of Medicaid now causing people to avoid coverage”