California lawmaker brings back Medicaid recovery bill

By Allison Bell

January 16, 2015 at 09:57 AM

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California state Sen. Ed Hernandez has brought back a bill that would limit the California Medicaid program's authority to seek recoveries from patients' estates.

The new bill, state Senate Bill 33, would let managers of the Medicaid program, Medi-Cal, make only the estate-recovery efforts that federal law requires it to make.

Hernandez, D-West Covina, Calif., and other supporters of estate-recovery limits note that Medi-Cal spent a total of about $56 billion on benefits in 2012-2013 and recovered only $59 million from patients' estates.

Gov. Jerry Brown, D, vetoed the previous version of the bill, S.B. 1125, in September 2013. Brown said in a veto message that the state ought to do more to analyze the potential cost of the change.

Section 1396p(b)(1)(B)(i) of Title 42 of the U.S. Code — a provision created by the Omnibus Budget and Reconciliation Act of 1993 (OBRA 93) — requires Medicaid programs to at least try to collect money spent on long-term care (LTC) services from the probate estate of a patient who was 55 or older. OBRA 93 lets a state exempt as much as $543,000 in home equity from the estate-recovery effort, and it requires states to establish procedures for deciding when estate-recovery would cause "undue hardship."

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