Calif. governor vetoes bill to protect dead Medicaid recipients' assets

California Gov. Jerry Brown, citing budget concerns, has vetoed a bill that would have limited what the state could recoup for healthcare costs from the estates of dead Medicaid beneficiaries. As a result, some eligible lower-income Californians may choose to not sign up for the program, advocates fret.

The federal government requires states to recover funds from Medicaid beneficiaries age 55 and older for long-term-care services such as nursing home care, but California is one of a few states that collects for all medical care, including premiums paid to a health plan on behalf of a beneficiary from age 55 until they become eligible for Medicare at age 65.

A bill drafted by Democratic state Sen. Ed Hernandez would have limited recovery from those 55 or older to what is required by federal law. It also would have prohibited asset recovery from the estates of surviving spouses of deceased beneficiaries of Medi-Cal, the state's Medicaid program, and require California to provide beneficiaries with a list of expenses subject to estate recovery.

Brown vetoed the bill, voicing concerns that Medi-Cal would lose as much as $30 million in program funds next year, according to estimates from the state's Finance Department, if the measure became law. He did express an openness to revisiting the matter in 2015, according to his veto justification notice. The denial is bad news for potential enrollees, advocates say.

“The current policy dissuades enrollment in Medi-Cal programs and at the end of the day really hurts low-income families and seniors,” said Kevin Prindiville, executive director of the National Senior Citizens Law Center. “We are disappointed.”

One concern is that low-income homeowners could conceivably lose their houses because of the law when the state goes after them or surviving spouses to recover back healthcare expenses.

A request for comment from Hernandez's office was not immediately returned.

Follow Virgil Dickson on Twitter: @MHvdickson