Trusts and Estates

Ca. Trs. & Estates Quarterly 2017, Volume 23, Issue 3

THE REVOLUTION IN CALIFORNIA’S MEDI-CAL RECOVERY PROGRAM

By Peter S. Stern, Esq.*

I. INTRODUCTION AND OVERVIEW

Governor Brown’s signature on SB 833 on June 29, 2016, turned nearly 25 years of California law on its head and opened the door to a new era in recovery under the state’s Medi-Cal program. The new law applies to individuals, including MediCal recipients or their spouses, who die on or after January 1, 2017, as well as Medi-Cal recipients who died before 2017 and who are survived by spouses who died on or after January 1, 2017.1 The law eliminates recovery for most non-nursing home services and restricts the possible recovery pool to the decedent’s probate estate, narrowly defined as what is subject to a formal probate procedure. If the Medi-Cal beneficiary is survived by a spouse or registered domestic partner, as well as other categories of individuals, the state cannot recover. In many regards, the new law takes recovery back to 1981, when Medi-Cal recovery was first started. Practitioners should note with caution that the new recovery law does not apply to payback due under legislation and regulations affecting special needs trusts.2

II. THE EARLY HISTORY OF MEDICAID RECOVERY

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