Thursday, June 25, 2015


In the midst of today’s celebration around the Supreme Court’s decision to uphold the Affordable Care Act, President Obama said:
“Five years ago, after nearly a century of talk, decades of trying, a year of bipartisan debate, we finally declared that in America, health care is not a privilege for a few but a right for all.

Perhaps he doesn’t know that impoverished Californians ages 55-65 are one of the few remaining groups that will have to pay for all of their own medical care.

For those of you who have been following my posts about Medi-Cal, you know that I put out an alert that going on Medi-Cal under Covered California could lead to the loss of your family home if you are between 55 and 65 years old. This is new news to for the many people who have just qualified for Medi-Cal because of the expanded program (Thanks Obama!), but as my post on Medi-Cal recovery explains, it is old news for everyone who has been dealing with the fact that Medi-Cal is a LOAN, not a public service, once you hit 55 (or if you are unlucky enough to fall in any of the other recovery categories). 

California’s Medi-Cal Recovery program requires the state to place a claim on the estates of those who received Medi-Cal benefits when they were 55 years of age or older to recoup benefits paid, regardless of the type of medical services received. All of this brings up a fundamental question that I keep asking:  

Why does Covered California provide subsidized health care for almost everyone, health care that never needs to be repaid, even for those that can only afford $1 a month in premiums, but not for the citizens ages 55-65 who are unlucky enough to be so extremely impoverished that California estimates they can’t afford even $1 a month? If they can’t afford even $1 a month in premiums, why are they the people who must pay for all of their own healthcare with the assets they built up over a lifetime? Usually their only asset is their home.
New research by Elise Gould of the Economic Policy Institute reveals that of the factors most commonly cited as driving poverty in America—education, family structure, race and more (see chart below)—the number-one factor by far is the growth in inequality, which added seven percentage points to the poverty rate since the late 1970s. Basically, inheriting your parent’s wealth, even if it is only a single paid off house, is one of the largest factors in your chance to achieve the American Dream.
More important than those good grades you struggled for in school, more important than the economy, more important than how many parents you had at home growing up.

This mandate is actually somewhat unique to California. Federal law does not require California to place claims on the estates of surviving spouses. Federal law does not require California to collect for optional benefits for those 55 and over. While other states have limited recovery to long term care and institutional services, California has maintained one of the most aggressive recovery programs in the country.

The result of this aggressive Medi-Cal recovery program has been an inordinate burden for the families of California’s low-income Medi-Cal beneficiaries. Here are some talking points put out by the California Advocates for Nursing Home Reform:

  • Medi-Cal beneficiaries cannot have more than $2,000 in liquid assets in order to be eligible. Thus, for most beneficiaries, the only asset they leave in their estates is a home.

  • Low income and minority Medi-Cal beneficiaries are disproportionately impacted by Medi-Cal recovery, not only because they are not adequately informed of their rights, but also because they can rarely afford the $300/hour attorney fees required for adequate representation to appeal estate recovery claims.

  • Many people would rather enroll in Covered California and pay a small premium than be subject to Medi-Cal estate recovery. However, individuals with incomes less than $16,243 year (or less than $21,984 for a couple) who are eligible for Medi-Cal cannot get tax credits for Covered California. People with subsidies through Covered California are benefitting from public payment for their health coverage but their estates are not subject to recovery when they die. Some people may pay as little as $1 per month for Covered California. 

  • This inequitable recovery system results in heirs and family members of deceased Medi-Cal beneficiaries in low-income communities having to sell their homes to pay off the estate recovery claim or sign a “voluntary lien” at 7% interest, so that the state of California can collect on the estate when they die.

  • The amount of funds that California’s Estate Recovery Program generates for the General Fund amounts to less than 1% of what California spends annually on Medi-Cal. The burdens of California’s current re- covery system far outweigh the benefits. Generations of families lose their family homes, simply because they did not know their rights.

  • The reality is that California’s recovery program contributes to creating a new generation of beneficiaries by forcing them to sell the family home or make monthly payments while charging usurious interest rates.

  • Under the current system, Medi-Cal is hardly a benefit for anyone 55 years of age or older. It is a very expensive health care loan.

  • We need to invest in the future for low-income Californians, and not continue to deny them the right to inherit the family home simply because their parents were not aware of their rights and were too poor to afford health care. We need to support SB 33. 

SB33, a bill making its way through the California Legislature right now, goes a long way to address the fundamental unfairness of forcing very poor people ages 55-65 to pay for their health care with their homes while everyone else, from birth to death, is now eligible for either subsidized health insurance or (for those over 65) medicare.

SB33 isn’t perfect, but it would allow thousands of older, low-income Medi-Cal beneficiaries to be relieved of the worry about losing their family homes.

Here is a quick overview of SB33:
This bill would limit Medi-Cal recovery for those who are 55+ years of age to only what is required by federal law, and eliminate optional recovery for other services; eliminate recovery on surviving spouses’ estates; allow hardship exemptions for homesteads of modest value and require the Department to provide claims detail information free of charge to current or former Medi-Cal beneficiaries and to post how to obtain this information on their website. SB 33 is co-sponsored with Western Center on Law and Poverty. Status: Passed the Senate and will be heard in the Assembly Health Committee on July 7, 2015.

Send letters of support to:
Assembly Health Committee, Assembly Member Rob Bonta, Chair 
State Capitol, Room 6005
Sacramento, CA 95814
Fax: 916-319-2197

It is especially important to write to the Governor, because a similar bill was passed by the legislature last year and vetoed by Brown.

Governor Jerry Brown
State Capitol
Sacramento, CA 95814
FAX: (916) 558-3160

Here is a sample letter.

For more information here is a fact sheet on SB33 put out by California Advocates for Nursing Home Reform.

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