Last week, the California state legislature passed a bill that would protect certain assets from being recouped by the state. Current law allows California, like many states, to recover the cost of Medicaid basic medical services provided to residents by seizing assets after they die. (Federal law requires states to recoup the cost of institutional care paid for by Medicaid.) Many Medicaid enrollees have to "spend down" their cash assets in order to receive benefits, but can usually keep real property. However, upon the death of a Medicaid beneficiary, the state may be able to recoup the cost of care from proceeds from a property's sale.
Ten states, including California, recover funds from the estates of Medicaid beneficiaries for basic health services. Advocates say this practice discourages some people from signing up for Medicaid, leading to worse health outcomes. The program as it is now allows the state to recoup approximately $30 million in Medicaid benefits. The bill has been sent to Governor Brown's office for signature, though it is not clear if he plans to sign it into law at this time.
Source: Kaiser Health News