Q. When Dad became unable to care for himself, I moved in with him and cared for him for as long as I could. When his care needs increased, we had to place him in a nursing home. He lived there about a year, on a Medi-Cal subsidy, before he passed. Recently, I received a reimbursement claim from Medi-Cal for about $90,000. Help! Is there anything I can do about this? We would like to fix up and sell his home, as Dad intended.
A. Perhaps, depending upon the facts. Background: Medi-Cal will subsidize the cost of a nursing home stay for individuals who are financially eligible. However, when that person dies, Medi-Cal will generally seek reimbursement for the amount of benefits paid out. This is called Estate Recovery and Medi-Cal will usually file a claim which prevents sale of the home until the claim is paid. However, there are exceptions to Estate Recovery, including the following: (1) Medi-Cal will waive its claim if the beneficiary is survived by a minor, blind or disabled child; (2) Medi-Cal will defer its claim if the beneficiary is survived by a spouse, but only until the death of the surviving spouse; and (3) Medi-Cal will waive a portion of its claim, based on hardship, if the beneficiary is survived by a child who qualifies as a “caregiver child”.
To qualify as a “caregiver child” you must have (a) moved in with your father, (b) rendered care to him for at least two years while residing in his home, and, (c) later prove to Medi-Cal, via letters from healthcare providers, that your in-home care actually delayed your father’s entry into a nursing home. Also, you must continue to reside in your parent’s home through the time of Medi-Cal’s determination on your application for waiver. This exception seemingly recognizes that, by caring for your father and delaying his entry into a nursing home, you have saved the state money and are deserving of a benefit in that he will now have a larger net estate to pass on to you.
Unfortunately, qualification for this exemption is difficult for most child-caregivers, partly because of the requirement that the child providing care must actually reside in the parent’s home during the entire time that care is rendered. If the child also maintains his or her own separate residence, Medi-Cal may deny the claim, forcing the matter to an administrative or judicial hearing with an uncertain outcome.
Also, if a waiver is granted, it would be only as to your proportionate share of your parent’s estate. For example, if you are one of three children designated to receive your parent’s estate, the waiver will be – at best – only as to one-third of the Medi-Cal claim. If the waiver is denied, remember that the claim is against your father’s estate, and you would not have personal responsibility to pay from your own assets. Also, there may be other options, such as a voluntary lien with a payment plan.
Had your father been able to take proactive planning steps during his lifetime, lawful strategies could have been implemented to protect the home from a Medi-Cal recovery claim entirely, avoiding the need to apply for waiver. Unfortunately, many people are not aware that preplanning is often the key to avoiding a Medi-Cal recovery claim. For those parents who wish to pass on as much as possible to their children without burdening their estate with a Medi-Cal recovery claim, know that lawful steps can be taken during lifetime to do just that.