New law is good news for Medi-Cal beneficiaries

A new law will make it much more difficult for Medi-Cal to recover against an individual's estate

Effective Jan. 1, 2017, there is good news for anyone who receives or may receive Medi-Cal benefits. 

Historically, on the death of a Medi-Cal beneficiary and the beneficiary’s spouse, Medi-Cal had the right to recover the value of the benefits it had paid, unless the beneficiary was survived by a disabled child.  This right to recover applied to all benefits paid on behalf of a beneficiary over 55, and all long-term care benefits paid regardless of age. Moreover, Medi-Cal's right of recovery applied to all of the beneficiary’s assets, regardless of whether they were held in a living trust. The result often proved financially devastating for the beneficiary’s heirs, who were compelled to sell the family home or liquidate other assets to satisfy a Medi-Cal recovery lien.

The new law, signed by Governor Jerry Brown in the fall, dramatically limits Medi’Cal’s recovery rights prospectively. Going forward, Medi-Cal can only recover assets that pass through probate. This means that if an individual dies with or without a will, Medi-Cal can recover against that individual’s property. However, if an individual holds his property in a living trust, in joint tenancy, or in a pay on death (POD) form, the assets are shielded from Medi-Cal.

Under the new law, Medi-Cal will no longer maintain any recovery right if the beneficiary is survived by a surviving spouse or domestic partner, or if the a beneficiary’s home is of “modest value,” meaning less than 50 percent of the average price of homes in the county where it is located.

Applicable to anyone who dies on or after Jan. 1, 2017, this law will make it much easier for Medi-Cal beneficiaries to protect their homes and other assets for their heirs, by establishing a living trust, transferring ownership to joint tenancy or a POD account when available.



Christine O. Breen opened Breen Law Firm in October 2013, where she represents companies and individuals in the areas of employment, trusts and estates, real property, and business transactions. Her clients hail primarily from San Benito, Monterey, Santa Cruz, and Santa Clara Counties. Ms. Breen currently serves on the Board of Directors of the Kinship Center, Gabilan Chapter, the Asset Development Committee of the Community Foundation of San Benito County, and Sacred Heart Parish School PASS Board. She is also a past member of the Free Lance Newspaper’s Editorial Board, the Central Coast Human Resources Association, and the Santa Clara County Bar Association’s Judiciary Committee, and the CASA Advisory Board of San Benito County. Ms. Breen is a member of the San Benito, Monterey, and Santa Clara County Bar Associations. She and her husband, Paul, reside in Hollister with their two sons, Thomas and James.