Five ways to avoid or limit the estate recovery Medi-cal

Estate Recovery medi-Cal

Many country governments are implementing policies to take care of their citizens. As an homage to President Kennedy, who was shot and killed in 1963, the following year, President Lyndon B. Johnson introduced a national program called “The Great Society,” which aimed to reduce the significant number of people living in poverty throughout the united states. Its premise is that Good government looks after the health and welfare of its citizens. 

One of these “Great Society” programs is Medi-Cal, which provides health care to the needy, enacted in 1966. This health insurance includes doctor and dentist appointments, prescription drugs, vision care, family planning, mental health care, and drug or alcohol treatment, including transportation to these services.  

New Policies of taxation were introduced to pay for this new Medi-Cal program.  One such program is called the Medi-Cal estate recovery program. The Medi-Cal Estate Recovery program, a systematic repayment from the estates of certain Medi-Cal members after they die. Repayment of benefits only applies to benefits received by members on or after their 55th birthday who own assets when they pass away.

What is Medi-Cal? 

Medi-Cal is a US Government-funded health care program in California. The program provides free or low-cost health care services to children and adults who have limited income and resources, who otherwise could not afford health care insurance.

Medi-Cal is partly funded by the state and partly by the federal government. The eligibility for this program is dependent on age, disability, income, or assets. The main functions of Medi-Cal are to help pay for doctor visits, hospital stays, prescription drugs, rehabilitation, and other medical services.

Medi-Cal is California’s insurance marketplace for people with limited income, covering Californians who couldn’t afford health care since 1966. If you qualify for financial assistance, the prices on insurance plans are low or free.

What is Medi-Cal Recovery?

When Medi-Cal recipient dies, the state will send an estate recovery claim to their heirs or survivors. The estate recovery claim asks for payment for the amount of Medi-Cal benefits paid on behalf of the deceased individual. This process ensures the government has enough funds to provide Medi-Cal service to others.

The state of California provides exemptions from the estate recovery process. The Estate recovery law was amended in January 2017, causing confusion among the people who took Medi-Cal before January 2017. Here are five ways to avoid or limit estate recovery.

Five ways to avoid or limit the estate recovery Medi-cal

The state may file a suit against your Estate for the number of benefits paid out by the Medi-Cal program or the value of your Estate, whichever is less. Under the previous law, you could be free from recovery if there were no assets left in your name. But as per the new amendment in January 2017, heirs are limited in the amount they can recover. 

  1. As of this date, recovery is only available to heirs whose decedent died intestate (had no will) by California law. It means the assets transferred via living trusts, joint tenancies, survivorship, and life estates will no longer be subject to recovery. 
  2. Manufactured homes and mobile homes are excluded from estate recovery claims because they’re not subject to probate in California. On another note, depending on the value of your Estate, assets distributed through a will might still be subject to probate in California.
  3. For Surviving spouse or Registered Domestic Partner, under the old laws before January 1, 2017, the state could not recover from a surviving spouse or registered domestic partner until after they died.
  4. After January 1, 2017, benefits are reinstated if the Medi-Cal member is survived by a spouse or registered domestic partner. Anyhow, suppose the surviving spouse or registered domestic partner also received Medi-Cal services subject to recovery at any time after registration in Partnership HealthPlan. In that case, they could be subject to an estate claim after their death if steps aren’t taken to avoid this possibility.
  5. Surviving Minors/Disabled Children: If the Medi-Cal recipient is survived by a minor child (under 21), the state cannot make estate recovery, and a claim is forever barred. If a disabled child of any age stays the Medi-Cal member as of today, the state or federal cannot recover, and a claim is forever barred. The child does not need to live with you or be an heir for this law to apply.


When we die, we may be subject to estate recovery. Our heirs and survivors may spend their time in probate court if there is no Living Trust for the Estate. New laws went into effect on or after January 1, 2017. I understand that California can only recover the amount of benefits paid.   Instead, seek an Estate Planning Trust and Probate Law specialist. A well-structured living trust will help you avoid estate recovery claim collections.   Lastly, I’m not an attorney or an accountant, I’m a local Realtor in Southern California who works with families who are either involved in the Probate court process or trying to avoid the lengthy and costly probate process.  Working with executors of estates, I’ve seen a thing or two and can help. I’ve got a network of service providers to access as well. You’ll have questions, call or text me Kevin McClenahan – Realtor – Probate and Trust Specialist at 858.284.7778.  If it’s after-hours email and someone will get back to you the next business day.

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