Question: In your recent column regarding the state recovery of Medi-Cal benefits, I was still left puzzled. My relative died and had under $1,900 left in her estate. She had no close relatives, but willed the money to nieces and nephews. As her designated administrator, I was about to parcel out these token sums to 19 people. But there seemed to be conflicts in your advice. While you told your letter writer: “I wouldn’t worry unduly (about the state recovering benefits),” you also said “the state pockets the money only to the extent of the money paid out by the state.”
Well, as everyone knows, one month in a nursing home paid by Medi-Cal will probably deplete $1,900 . . . so how can we think the state will not demand payment, and why shouldn’t we unduly worry about it? I tried to get some straight answers from Medi-Cal officials, but no one could say flatly the state would not come after these funds. Also, how long do I have to wait to know that I can safely disburse these funds? No one could tell me.--E.B.
Answer: Well, I don’t blame you for the bafflement. As one executive with the Los Angeles County Department of Social Services put it: “Medi-Cal is undoubtedly the most complex law on the books in this state.” And I’ll have to admit that my reassurances in the earlier column were actually directed to the letter writer, a recipient of Medi-Cal benefits, not to the poor administrator trying to cope--as you are--with the distribution of those meager remaining assets after the recipient’s death.
Admittedly too the bulk of the previous column dwelt on such complex matters as determining the recipient’s “share of cost,” the “maintenance fee” and so forth, which are important (to the recipient) while she is still alive, but have limited relevance to her heirs later.
Unfortunately, the situation doesn’t get any less complex once the Medi-Cal recipient dies, because what--if anything--is left of his or her estate that is subject to recovery by the state has to be determined on a case-by-case basis.
As Linda McClure, a supervisor with the California Department of Health Services in Sacramento, puts it: “A lot of it depends on the age of the recipient at the time of death. If he or she is under 65 years of age, then we have no claim at all. If he or she were over 65, then we would have a claim against the money, unless the funeral expenses exceeded that. Funeral expenses have priority over any creditors’ claims, including the state.
“There are a lot of considerations that go into this,” McClure adds, “with age, again, a major factor. How much of the expenses were taken care of by Medicare, for instance? Was there was an attorney involved? That sort of thing.”
Your reluctance to dole out the $1,900 to 19 nieces and nephews without knowing whether any of the $1,900 is really available for distribution is probably well-founded. But for a meaningful determination, you’ll have to write to Sacramento and include a copy of your relative’s death certificate and an accounting of all funeral expenses, including attorney’s fees (if this is applicable).
Send it to: California Department of Health Services, 1250 Sutterville Road, Suite 206, Sacramento, Calif. 95822. In the meantime, personally, I’d hang onto the money until you get a definitive ruling on whether the state has a claim against her estate and how long the issue will hang in limbo.
Q: In your recent column about the widow whose husband had elected a “10-year certain and life” annuity, you were in error in defining it as meaning that the “company will pay the pension for 10 years after his retirement.” If you had added the words, “if he dies within that period,” you would have been correct. If he lives beyond 10 years, the plan continues to pay.--R.C.
A: Yes, you’re dead right and I should have come to you for my definition of “10-year certain and life,” rather than relying on the source that I chose. In actuality, as you point out, this option gives the retiree a fixed annuity no matter how long he lives. But if he dies during the first 10 years after his retirement, the annuity will continue to pay his estate but will stop at that 10-year point.
You also made another interesting point: that the lady’s now-deceased husband may have known, full well, what he was doing in choosing this option. As you put it: “It is more likely that he decided that $833.29 monthly with a minimum of 10 years guaranteed was better than $781.17 monthly for his lifetime, with $390.59 continuing for his wife’s lifetime following his death. These would be actuarially equivalent amounts, assuming a 6% interest rate.”
A very good point, indeed, and I was happy that you agreed with my appraisal that her husband’s former employer is in a “sticky” situation because the widow was assured, in writing, that the monthly payment would continue for the rest of her life.
Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer VIEWS, You section, The Times, Times Mirror Square, Los Angeles 90053.